<PAGE> 1
===============================================================================
SCHEDULE 14A
(RULE 14A)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
BRUSH WELLMAN INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies: ______
(2) Aggregate number of securities to which transaction applies: _________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
______________________________________________________________________
(4) Proposed maximum aggregate value of transaction: _____________________
(5) Total fee paid: ______________________________________________________
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ______________________________________________
(2) Form, Schedule or Registration Statement No.: ________________________
(3) Filing Party: ________________________________________________________
(4) Date Filed: __________________________________________________________
===============================================================================
<PAGE> 2
BRUSH WELLMAN INC.
17876 St. Clair Avenue
Cleveland, Ohio 44110
------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The annual meeting of shareholders of Brush Wellman Inc. will be held at
the Stouffer Tower City Plaza Hotel, 24 Public Square, Cleveland, Ohio on
Tuesday, May 2, 1995 at 11:00 A.M. (Cleveland time), for the following purposes:
(1) To elect three directors, each to serve for a term of three years and
until a successor shall have been elected and qualified.
(2) To approve adoption of the Brush Wellman Inc. 1995 Stock Incentive
Plan.
(3) To ratify and approve the selection of Ernst & Young LLP as independent
auditors of the Company for the year 1995.
(4) The transaction of such other business as may properly come before such
meeting.
The Board of Directors has fixed the close of business on March 7, 1995 as
the record date for the determination of shareholders entitled to notice of, and
to vote at, the meeting or any adjournment thereof.
MICHAEL C. HASYCHAK
Secretary
March 13, 1995
IMPORTANT -- YOUR PROXY IS ENCLOSED
PLEASE SIGN, DATE AND RETURN YOUR ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE.
<PAGE> 3
BRUSH WELLMAN INC.
17876 St. Clair Avenue
Cleveland, Ohio 44110
PROXY STATEMENT
MARCH 13, 1995
This statement is furnished in connection with the solicitation by the
Board of Directors of Brush Wellman Inc. (the "Company") of proxies to be used
at the annual meeting of shareholders of the Company to be held on May 2, 1995.
This statement and the related form of proxy are being sent to shareholders on
or about the date of this statement.
If the enclosed form of proxy is properly executed and returned, the shares
represented by it will be voted at the meeting. The proxy may be revoked at any
time prior to its exercise by giving notice to the Company in writing or in open
meeting.
As of March 7, 1995, the record date for the meeting, the Company had
outstanding and entitled to vote 16,123,055 shares of Common Stock.
Each outstanding share of Common Stock is entitled to one vote on each
matter brought before the meeting. Under Ohio law, shareholders have cumulative
voting rights in the election of directors, provided not less than 48 hours
notice in writing is given by any shareholder to the President, any Vice
President or the Secretary of the Company that he desires that voting at such
election be cumulative, and an announcement of the giving of such notice is made
upon the convening of the meeting. When cumulative voting applies, each share
has a number of votes equal to the number of directors to be elected, and a
shareholder may give all of his votes to one nominee or divide his votes among
as many nominees as he sees fit. Unless contrary instructions are received on
proxies given to the Company, in the event that cumulative voting applies, all
votes represented by such proxies will be divided evenly among the candidates
nominated by the Board of Directors, except that if voting in such manner would
not be effective to elect all such nominees, such votes will be cumulated in the
discretion of the Company so as to maximize the number of such nominees elected.
At the annual meeting, the results of shareholder voting will be tabulated
by the inspector of elections appointed for the annual meeting. Under Ohio law
and the Company's Articles of Incorporation and Regulations, properly executed
proxies that are marked "abstain" or are held in "street name" by brokers and
not voted on one or more of the items (if otherwise voted on at least one item)
will be counted for purposes of determining whether a quorum has been achieved
at the annual meeting. Votes withheld in respect of Item 1 will not be counted
in determining the election of Directors. Abstentions and broker non-votes in
respect of Items 2 and 3 will not be considered as votes cast for purposes of
determining whether those matters are approved except as indicated under item 2
(see "1995 Stock Incentive Plan -- Recommendation").
In addition to the solicitation of proxies by the use of the mails,
officers and other employees of the Company may solicit the return of proxies by
personal interview, telephone and telecopy. Brokerage houses, banks and other
custodians, nominees and fiduciaries will be requested to forward soliciting
material to the beneficial owners of shares and will be reimbursed for their
expenses. The costs of the solicitation of proxies will be borne by the Company.
<PAGE> 4
ELECTION OF DIRECTORS
At the present time it is intended that proxies will be voted for the
election of Frank B. Carr, Gerald C. McDonough and John Sherwin, Jr. as
directors for a term of three years and until the election of their successors.
Each of such nominees has been previously elected as a director by shareholder
action. Julien L. McCall will retire from the Board of Directors upon the
expiration of his term on May 2, 1995. Pursuant to the Company's Code of
Regulations, the class of directors whose terms expire in 1995 has been reduced
by the Board of Directors from four to three members effective upon Mr. McCall's
retirement.
If any of these nominees should become unavailable, it is intended that the
proxies will be voted as the Company shall determine. The Company has no reason
to believe that any of the nominees will be unavailable. The three nominees
receiving the greatest number of votes will be elected as directors of the
Company.
The following table sets forth information concerning the nominees and the
directors whose terms of office will continue after the meeting:
<TABLE>
<CAPTION>
NOMINEES FOR TERMS ENDING IN 1998 CURRENT EMPLOYMENT
--------------------------------------------------------------------------------
<S> <C>
FRANK B. CARR Managing Director, Corporate Finance,
Director since 1970 McDonald & Company Securities, Inc.
Member -- Audit Committee, (investment banking and securities brokerage
Pension Review Committee, firm)
Finance Committee and
Nominating Committee
Age -- 67
Mr. Carr has been a Managing Director, Corporate Finance of McDonald & Company
Securities, Inc. during the past five years. He is a director of Invacare
Corporation and Preformed Line Products Company.
--------------------------------------------------------------------------------
GERALD C. MCDONOUGH Retired Chairman and Chief Executive Officer,
Director since 1983 Leaseway Transportation Corp. (trucking,
Member -- Finance Committee, leasing and distribution services company)
Nominating Committee and
Organization and
Compensation Committee
Age -- 66
Mr. McDonough was Chairman and Chief Executive Officer of Leaseway
Transportation Corp. until his retirement in 1988. He is a director of
Acme-Cleveland Corporation, Associated Estates Realty Corporation, Commercial
InterTech Corp., York International Corp. and is also a Trustee of the Fidelity
Funds.
--------------------------------------------------------------------------------
JOHN SHERWIN, JR. President, Mid-Continent Ventures, Inc.
Director since 1981 (venture capital company)
Member -- Audit Committee and
Pension Review Committee
Age -- 56
Mr. Sherwin has been President of Mid-Continent Ventures, Inc. during the past
five years.
--------------------------------------------------------------------------------
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
DIRECTORS WHOSE TERMS END IN 1997 CURRENT EMPLOYMENT
--------------------------------------------------------------------------------
<S> <C>
GORDON D. HARNETT Chairman of the Board, President and Chief
Director since 1991 Executive Officer of the Company
Age -- 52
Mr. Harnett was elected Chairman of the Board, President and Chief Executive
Officer of the Company effective January 1991. He had served as a Senior Vice
President of The B. F. Goodrich Company from November 1988. He is a director of
Essef Corporation and National City Bank, Cleveland.
--------------------------------------------------------------------------------
WILLIAM P. MADAR President and Chief Executive Officer,
Director since 1988 Nordson Corporation
Member -- Audit Committee, (industrial equipment manufacturer)
Nominating Committee and
Organization and Compensation
Committee
Age -- 55
Mr. Madar has been President and Chief Executive Officer of Nordson Corporation
during the past five years. He is a director of Lubrizol Corporation, National
City Bank, Cleveland and Nordson Corporation.
--------------------------------------------------------------------------------
ROBERT M. MCINNES Business Consultant
Director since 1977
Member -- Audit Committee,
Organization and Compensation
Committee and Finance
Committee
Age -- 64
Mr. McInnes was Of Counsel to the law firm of Arter & Hadden from November 1988
to November 1994. Prior to that time he was Group Executive Vice President of
Cleveland-Cliffs Inc. He had also served as President and Chief Executive
Officer of Pickands Mather & Co., which became a wholly-owned subsidiary of
Cleveland-Cliffs Inc. in December 1986. He is a Director of Cliffs Drilling
Company.
--------------------------------------------------------------------------------
HENRY G. PIPER Retired President and Chief Executive Officer
Director since 1967 of the Company
Member -- Audit Committee
and Pension Review Committee
Age -- 72
Mr. Piper served as President, Chairman of the Board and Chief Executive Officer
of the Company until his retirement from the Company on December 31, 1988. Mr.
Piper resumed employment with the Company as President and Chief Executive
Officer on January 23, 1990. Mr. Piper resigned from his positions effective
upon the election of Mr. Harnett as Chairman of the Board, President and Chief
Executive Officer on January 22, 1991. He remained an employee of the Company
until April 30, 1991. He is a Director of First Union Management Inc.
--------------------------------------------------------------------------------
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
DIRECTORS WHOSE TERMS END IN 1996 CURRENT EMPLOYMENT
--------------------------------------------------------------------------------
<S> <C>
ALBERT C. BERSTICKER President and Chief Executive Officer, Ferro
Director since 1993 Corporation (specialty materials)
Member -- Nominating Committee,
Organization and
Compensation Committee and
Pension Review Committee
Age -- 60
Mr. Bersticker was elected Chief Executive Officer of Ferro Corporation in 1991.
He has been its President during the past seven years. Mr. Bersticker is a
director of Ferro Corporation, Centerior Energy Corporation, KeyCorp Inc. and
Oglebay Norton Company.
--------------------------------------------------------------------------------
DR. CHARLES F. BRUSH, III Personal investments
Director since 1958
Member -- Finance Committee,
Nominating Committee and
Organization and Compensation
Committee
Age -- 71
There has been no change in Dr. Brush's occupation during the past five years.
--------------------------------------------------------------------------------
CLARK G. WAITE Retired Senior Vice President of the Company
Director since 1978
Age -- 62
Mr. Waite retired as an officer of the Company effective January 31, 1995. He
had been elected Senior Vice President in November 1994. In October 1991 he was
elected Senior Vice President-Finance and Administration. He had been Chief
Financial Officer since September 1987 and Secretary since January 1, 1988.
===============================================================================
</TABLE>
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors maintains, among other committees, an Audit
Committee, Finance Committee, Nominating Committee, Organization and
Compensation Committee and Pension Review Committee, the members of which are
identified in the above table.
The Audit Committee held three meetings in 1994. Its principal functions
include the engagement of independent auditors or recommending action by the
full Board of Directors with respect thereto; reviewing the scope and results of
the audit and any non-audit services performed by such auditors; reviewing the
adequacy of the Company's internal auditing, accounting and financial controls;
and reviewing with independent auditors their report and opinion upon completion
of their audit, including a review of any significant transactions not in the
ordinary course of business and compliance with Company policies and codes of
conduct.
The Finance Committee held four meetings in 1994. Its principal functions
include monitoring and making recommendations to the Board of Directors
regarding debt, capital structure, dividend policy and shareholder relations.
The Nominating Committee held three meetings in 1994. Its principal
functions include evaluation of candidates for Board membership (including any
nominations of qualified candidates submitted in writing by security holders to
the Secretary of the Company) and recommendations to the full Board of Directors
of candidates to fill executive vacancies that arise from time to time.
4
<PAGE> 7
The Organization and Compensation Committee held three meetings in 1994.
Its principal functions include reviewing executive compensation, taking action
where appropriate or making recommendations to the full Board of Directors with
respect thereto, recommending the adoption of executive benefit plans, granting
stock options and other awards, and recommending action on matters relating to
management succession and changes in organizational structure.
The Pension Review Committee held two meetings in 1994. Its principal
function is reviewing the investment of pension funds and the investment
elections available to participants in the Savings and Investment Plan.
The Board of Directors held ten meetings in 1994. All of the directors
attended at least 75% of the total meetings held by the Board of Directors and
by the Committees on which they served during 1994.
DIRECTOR COMPENSATION
Each director who is not an officer of the Company receives fees of $16,500
for each calendar year plus $1,000 for attending each meeting of the Board of
Directors and each meeting of a Committee thereof. The Chairman of each
Committee (if not an officer) receives an additional $1,000 on an annual basis.
The Deferred Compensation Plan for Nonemployee Directors was approved by
shareholders in 1992. The Plan provides each nonemployee director the
opportunity to defer receipt of all or a portion of the compensation payable for
his services as a director. The Company, in turn, transfers an amount equal to
the reduction in compensation to a trust, which amounts are invested, at the
director's discretion, in the Company's Common Stock or in accordance with the
Company's investment policy.
The Company established a Stock Option Plan for Non-Employee Directors in
1990. The Plan authorizes a one-time grant of a non-qualified option to purchase
shares of Common Stock to each non-employee director who has never been an
employee of the Company. Eight directors each received a grant on April 25, 1990
for 5,000 shares of the Company's Common Stock at an exercise price of $22.81.
One director received a grant on April 27, 1993 for 5,000 shares of the
Company's Common Stock at an exercise price of $11.81. The option price of each
option granted under the Plan is equal to the average of the high and the low
market price of the Common Stock on the date of grant. Each option becomes
exercisable six months after the date of grant and expires ten years after the
date of grant, subject to earlier termination in the event of termination of
service on the Board or disability. The Plan also provides for one-time grants
for up to three future directors upon their election or appointment to the
Board.
The Company's Directors Retirement Plan provides that a non-officer
director, upon reaching age 65 and who shall thereafter die or retire from the
Board and shall have served as a director for a minimum of seven years or
attained the age of 70, shall receive for the number of years equal to his
non-employee service, but not exceeding 15 years, after the date of his death or
retirement, annual compensation in an amount equal to the rate of the annual
retainer, including any Committee chairmanship, for non-officer directors in
effect on the date of such death or retirement. Such amount shall be paid
quarterly or, at the director's election and subsequent approval by the
Organization and Compensation Committee, or in the event of death, in a lump sum
equivalent to the present value of the unpaid quarterly payments using the
Pension Benefit Guaranty Corporation interest rate in effect for determining
lump sum benefits under the Brush Wellman Inc. Salaried Pension Plan. Directors,
except those having reached age 65 before December 31, 1988, shall retire at the
end of the year in which they reach their seventieth birthday.
5
<PAGE> 8
<TABLE>
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS,
DIRECTORS AND MANAGEMENT
The following table sets forth information regarding ownership of the
Company's Common Stock as of January 31, 1995 by Directors, each of the named
executive officers, all directors and executive officers as a group and certain
other persons owning more than 5% of the Company's Common Stock. Unless
otherwise indicated, persons named below held sole voting power and investment
power with respect to their shares of the Company's Common Stock.
<CAPTION>
SHARES OF COMMON STOCK PERCENT OF COMMON STOCK
NON-OFFICER DIRECTORS BENEFICIALLY OWNED(1) BENEFICIALLY OWNED
-------------------------------- ---------------------- -----------------------
<S> <C> <C>
Albert C. Bersticker............ 5,500(2) *
Dr. Charles F. Brush, III....... 331,136(2)(3) 2.0%
Frank B. Carr................... 17,000(2) *
William P. Madar................ 13,326(2) *
Julien L. McCall................ 5,500(2) *
Gerald C. McDonough............. 23,231(2)(4) *
Robert M. McInnes............... 9,100(2) *
Henry G. Piper.................. 11,169(5) *
John Sherwin, Jr................ 23,129(2)(6) *
EXECUTIVE OFFICERS
------------------
Gordon D. Harnett............... 191,986(2) 1.1%
Clark G. Waite.................. 146,102(2)(7) *
Stephen Freeman................. 18,990(2) *
Craig B. Harlan................. 76,916(2) *
Robert H. Rozek................. 74,015(2) *
All directors and executive
officers as a group (17
persons)...................... 1,107,853(8) 6.6
OTHER PERSONS
-------------
Trimark Investment Management
Inc.
40 King Street West 5200
Toronto, Ontario, Canada...... 1,304,000(9) 8.1%
State of Wisconsin Investment
Board
P.O. Box 7842
Madison, Wisconsin............ 990,000(10) 6.1%
Brush Wellman Inc. Savings and
Investment Plan............... 940,367(11) 5.8%
State Street Bank and Trust Co.
of Boston
225 Franklin Street
Boston, Massachusetts......... 810,255(12) 5.0%
<FN>
---------
* Less than 1% of Common Stock.
====================================================================================
(1) Reported in accordance with the beneficial ownership rules of the
Securities and Exchange Commission (the "Commission"), under which a person
is deemed to be the beneficial owner of a security, for these purposes, if
he has or shares voting power or investment power in respect of such
security or has the right to acquire such security within 60 days. The
shares shown include shares credited to the account of each executive
officer under the Company's Savings and Investment Plan. The shares shown
in the table do not purport
6
<PAGE> 9
to represent beneficial ownership for any purpose other than compliance
with the Commission's reporting requirements.
(2) Includes shares covered by outstanding options exercisable within 60 days,
as follows: Mr. Harnett, 185,000; Mr. Waite, 102,000; Mr. Harlan, 74,200;
Mr. Rozek, 69,700; Mr. Freeman, 18,600; and 5,000 for each of Messrs.
Bersticker, Brush, Carr, Madar, McCall, McDonough, McInnes and Sherwin.
(3) Includes 32,000 shares owned by the Charles F. Brush III Charitable
Remainder Unitrust of which Dr. Brush is trustee and 3,000 shares owned by
Dr. Brush's wife, as to all of which Dr. Brush disclaims ownership.
(4) Includes 1,000 shares owned by Mr. McDonough's wife of which Mr. McDonough
disclaims ownership.
(5) Includes 400 shares owned by Mr. Piper's child of which Mr. Piper disclaims
ownership.
(6) Includes 10,334 shares owned by Mr. Sherwin's wife and children of which
Mr. Sherwin disclaims ownership.
(7) Includes 7,778 shares owned by Mr. Waite's wife of which Mr. Waite
disclaims ownership.
(8) Includes 645,000 shares subject to outstanding options held by officers and
directors and exercisable within 60 days.
(9) Information regarding share ownership was obtained from Amendment No. 2 to
Schedule 13G filed with the Commission on February 12, 1993.
(10) Information regarding share ownership was obtained from Amendment No. 5 to
Schedule 13G filed with the Commission on February 13, 1995.
(11) The Northern Trust Company, Chicago, Illinois, trustee for the Brush
Wellman Inc. Savings and Investment Plan holds the shares in trust. All
participants share voting power with the trustee of the Plan with respect
to shares credited to their account.
(12) Information regarding share ownership was obtained from Schedule 13G filed
with the Commission on March 8, 1995.
</TABLE>
7
<PAGE> 10
<TABLE>
EXECUTIVE OFFICER COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth total annual compensation earned during the
Company's last three years by the Chief Executive Officer and by the four most
highly compensated executive officers other than the Chief Executive Officer.
<CAPTION>
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION(1) AWARDS(2)
----------------------------------------------------------- ------------
NAME AND SECURITIES
PRINCIPAL UNDERLYING ALL OTHER
POSITION YEAR SALARY($) BONUS($) OPTIONS(#) COMPENSATION($)(3)
----------------------------- ----- -------- -------- ------------ ------------------
<S> <C> <C> <C> <C> <C>
Gordon D. Harnett 1994 322,500(4) 253,800 30,000 9,673(4)
Chairman of the 1993 315,000(4) 0 30,000 18,615(4)
Board, President and 1992 311,250 307,500 40,000 7,088
Chief Executive Officer
Clark G. Waite (5) 1994 171,374 134,653(6) -0- 7,764(6)
Senior Vice President 1993 167,600 0 15,000 6,914
1992 166,450 83,800 15,000 5,894
Craig B. Harlan 1994 166,000 92,130 7,500 4,980
Vice President Interna- 1993 165,600 0 10,000 6,694
tional-Europe 1992 163,300 57,540 15,000 5,379
Stephen Freeman(7) 1994 146,041 81,651 10,000 4,381
Vice President 1993 142,104 0 15,000 2,142
Alloy Products 1992 70,002 35,000 6,000 -0-
Robert H. Rozek 1994 138,348 80,475 10,000 4,150
Senior Vice President 1993 126,875 0 12,000 5,119
International and 1992 124,583 43,750 12,000 4,218
Beryllium Products
<FN>
---------------
(1) No compensation was paid to any of the named executive officers that
requires disclosure as "Other Annual Compensation."
(2) There were no restricted stock awards to any of the named executive officers
for any of the years listed.
(3) Represents Company matching contributions to the Brush Wellman Inc. Savings
and Investment Plan.
(4) Salary for 1994 and 1993 includes deferred compensation of $5,200 and
$16,169, respectively. All Other Compensation for 1994 and 1993 includes
Company matching contributions pursuant to the Brush Wellman Inc.
Supplemental Retirement Benefit Plan of $2,600 and $11,809, respectively.
(5) Mr. Waite retired as an officer of the Company effective January 31, 1995.
(6) Bonus for 1994 includes $3,054 deferred compensation, and All Other
Compensation includes $1,527 Company matching contributions pursuant to the
Brush Wellman Inc. Supplemental Retirement Benefit Plan.
(7) Mr. Freeman began employment with the Company in July 1992.
</TABLE>
8
<PAGE> 11
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information on option grants during 1994 to
the executive officers included in the Summary Compensation Table. There was one
grant of options to the named executive officers during the year.
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------------------------------------
% OF TOTAL POTENTIAL REALIZABLE VALUE AT
(#) OF OPTIONS ASSUMED ANNUAL RATES OF STOCK
SECURITIES GRANTED TO EXERCISE PRICE APPRECIATION FOR OPTION
UNDERLYING EMPLOYEES OR BASE TERM
OPTIONS IN FISCAL PRICE EXPIRATION ------------------------------
NAME GRANTED YEAR ($/SH) DATE 0% ($) 5% ($) 10% ($)
--------------------- ---------- ----------- -------- ---------- ------ -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Gordon D. Harnett
Chairman of the
Board, President and
Chief Executive
Officer 30,000 14.24 $15.75 12/19/04 $ -0- $294,450 $757,345
Clark G. Waite(1)
Senior Vice President -0-
Craig B. Harlan
Vice President
International -
Europe 7,500 3.56 $15.75 12/19/04 $ -0- $ 74,290 $188,260
Stephen Freeman
Vice President Alloy
Products 10,000 4.75 $15.75 12/19/04 $ -0- $ 99,050 $251,015
Robert H. Rozek
Senior Vice President
International and
Beryllium Products 10,000 4.75 $15.75 12/19/04 $ -0- $ 99,050 $251,015
<FN>
---------------
(1) Mr. Waite retired as an officer of the Company effective January 31, 1995.
</TABLE>
Stock options generally become exercisable six months from date of grant
and generally expire ten years from date of grant as long as the optionee
continues to be an employee of the Company. The option price is determined based
on the average of the high and the low market price on date of grant. The option
price may be paid by the optionee in cash or common stock of the Company or any
combination thereof. Options are not transferable except by will or laws of
descent. Options are not repriced except to prevent dilution or enlargement of
the rights of the optionee.
9
<PAGE> 12
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table provides information concerning unexercised stock
options held by the executive officers included in the Summary Compensation
Table and the value of such officers' unexercised options at December 31, 1994.
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING
UNEXERCISED OPTIONS VALUE OF UNEXERCISED
SHARES AT DECEMBER 31, IN-THE-MONEY OPTIONS
ACQUIRED VALUE 1994(#) AT DECEMBER 31,
ON EXERCISE REALIZED EXERCISABLE/ 1994($) EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
------------------------- ----------- -------- --------------------- ---------------------
<S> <C> <C> <C> <C>
Gordon D. Harnett 185,000/ $ 390,175/
Chairman of the Board, 30,000 $ 48,750
President and
Chief Executive Officer
Clark G. Waite 102,000/ $ 149,200/
Senior Vice President -0- $ -0-
Craig B. Harlan 74,200/ $ 83,500/
Vice President 7,500 $ 30,125 7,500 $ 12,188
International - Europe
Stephen Freeman 18,600/ $ 62,625
Vice President Alloy 12,400 $ 19,850
Products
Robert H. Rozek 69,700/ $ 139,623/
Senior Vice President 10,000 $ 16,250
International and
Beryllium Products
</TABLE>
REPORT OF ORGANIZATION AND COMPENSATION COMMITTEE ON
EXECUTIVE COMPENSATION
The Organization and Compensation Committee of the Board of Directors (the
"Committee") is composed entirely of non-employee directors. The Committee is
responsible for developing and making policy recommendations to the Board with
respect to the Company's executive compensation. In addition, the Committee,
pursuant to authority delegated by the Board, determines on an annual basis the
compensation to be paid to the Chief Executive Officer (the "CEO") and each of
the other executive officers of the Company.
COMPENSATION PHILOSOPHY -- PAY FOR PERFORMANCE
The Committee's compensation philosophy is to recognize superior results
with superior monetary rewards. Where results are below expectations, pay will
directly reflect the less-than-targeted performance.
TOTAL COMPENSATION STRATEGY
The executive compensation strategy is to attract and retain qualified
executives and to provide appropriate incentives to achieve the long-term
success of the Company and to enhance shareholder value over the long term. The
Company employs a total compensation strategy, taking into consideration base
pay, performance compensation, and long-term incentives. Base salary is
generally established at moderately competitive levels, and greater weight is
put on the performance-driven portions of the compensation package.
10
<PAGE> 13
BASE SALARY
In 1994, average base salary increases were less than average market
increases. For example, the CEO's base salary was increased 3.2%. During 1994,
the Company retained the services of an outside consultant who confirmed, in
general, that base salaries were aligned with market medians (50th percentile)
for comparable positions in the marketplace. The consultant utilized a variety
of published and proprietary surveys to determine appropriate compensation
levels for each position. These surveys included data gathered from numerous
companies in the metals industry and general manufacturing, including surveys
focusing on comparably-sized companies. Accordingly, the survey samples were
substantially broader than the group of seven other companies reflected in the
Dow Jones Non-Ferrous U.S. Metals Index used on the performance graph.
PERFORMANCE COMPENSATION
A Management Performance Compensation Plan (the "Plan") provides for annual
single-sum cash payments that are based on achieving preestablished financial
objectives. There are two separate financial measures which are established by
the Committee on an annual basis. Each financial measure has a minimum and
maximum value. Plan awards for executive officers as a percentage of base salary
are based approximately half on achieving an annual earnings objective and half
on achieving a return on invested capital objective that exceeds the three-year
trailing median of Standard & Poor's "A" rated industrial companies. If either
earnings or return on invested capital is at or below minimum, no related
performance compensation is earned for that particular objective. The CEO is a
participant in the Plan, and his annual performance compensation is based on the
above specific factors that relate solely to the financial performance of the
Company. The percentage of base salary available for performance compensation
varies according to the level of performance achieved and the level of the
individual's responsibility. The CEO and the Senior Vice President could attain
52% of base pay for achieving the earnings target and 78% of base pay for
exceeding the target and maximizing the annual earnings objectives. Likewise,
the other executive officers could attain 37% and 55.5%, respectively. In
addition, the CEO and Senior Vice President could attain 50% and other executive
officers 35% of base pay for achieving the return on invested capital target. In
1994, the annual earnings exceeded the maximum annual earnings objective, and
payouts of 78% to the CEO and Senior Vice President and 55.5% to the other
executive officers were made.
The minimum return on invested capital target was not achieved, and no
payouts were made under this component of the plan.
LONG-TERM INCENTIVES
Long-term incentives are provided through the grant of options to purchase
stock under option plans approved by shareholders. In 1994 a total of 110
management employees were awarded options.
The Company has a performance management process, which establishes
personal and team objectives at the start of each year and includes a review of
progress toward those objectives at year end. Option awards in 1994 were based
on individual performance reviews and the optionee's potential impact on the
success of the Company. The Committee decided on the option amounts for the CEO
and executive officers based upon the Committee's judgment of their individual
performance and also taking into account market comparative stock option grants
as determined by the consulting firm who, in 1994, analyzed base salaries for
the Company. The overall number of option shares granted was approximately 1.3%
of total shares outstanding, slightly lower than average grants over the past
several years.
During 1994, the Company had a Stock Appreciation Rights (SAR) Plan that
was approved by shareholders in 1977. No SARs have been issued since 1988.
11
<PAGE> 14
During 1994, the Committee and management initiated an in-depth study of
the Company's total compensation practices for executives. One of the results of
this study was the decision to refocus the long-term component of compensation
from exclusive reliance on stock options to include stock awards based on
achievement of predetermined, long-term financial objectives. In addition, the
cash incentive program previously based on achieving a return on invested
capital target would be changed to a stock award to align long-term incentives
more closely with shareholder interests. The 1995 Stock Incentive Plan to be
presented to the Company's shareholders at the 1995 annual meeting is designed,
among other things, to enable the Committee to implement this strategy.
1993 TAX ACT
The $1 million limitation on deductibility of executive compensation
imposed by the 1993 Tax Act (Section 162(m) of the Internal Revenue Code) has no
immediate applicability to the Company. The Committee's general philosophy will
be to "qualify" future long-term incentive plans for tax deductibility wherever
appropriate, recognizing that, under certain circumstances, the limit may be
exceeded.
The foregoing report has been furnished by the Committee.
William P. Madar (Chairman)
Albert C. Bersticker
Charles F. Brush, III
Gerald C. McDonough
Robert M. McInnes
12
<PAGE> 15
<TABLE>
CUMULATIVE TOTAL SHAREHOLDER RETURN
The following graph sets forth the five-year cumulative total shareholder
return on the Company's Common Stock as compared to the cumulative total return
for the same period of the S&P 500 Index and the Dow Jones Non-Ferrous U.S.
Metals Index. The Company is a member of the Dow Jones Non-Ferrous U.S. Metals
Index.
COMPARISON OF FIVE YEAR TOTAL RETURN*
<CAPTION>
DJ NON-
MEASUREMENT PERIOD BRUSH WELL- FERROUS U.S.
(FISCAL YEAR COVERED) MAN INC. S&P 500 METALS
--------------------- ------------ --------- ------------
<S> <C> <C> <C>
1989 100 100 100
1990 69 97 87
1991 69 126 91
1992 79 136 102
1993 75 150 101
1994 92 147 128
<FN>
* Assumes that the value of the Common Stock of Brush Wellman Inc. and each
index was $100 on December 31, 1989 and that all dividends were reinvested.
</TABLE>
13
<PAGE> 16
PENSION AND RETIREMENT BENEFITS
The Company's Pension Plan for Salaried Employees is a defined benefit
plan. The following table shows the estimated annual pension benefits under the
Salaried Pension Plan as well as benefits provided under the Company's
Supplemental Retirement Benefit Plan, to the extent that they supplement
benefits provided under the Salaried Pension Plan, which would be payable,
without reduction for any optional form of payment, to employees in various
compensation classifications upon retirement in 1994 at age 65 after selected
periods of service:
<TABLE>
PENSION PLAN TABLE
<CAPTION>
FINAL AVERAGE YEARS OF SERVICE AT AGE 65
ANNUAL PAY -------------------------------------------------------------------------
AT AGE 65 10 YEARS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$ 150,000 $ 30,000 $ 45,000 $ 52,500 $ 60,000 $ 67,500 $ 75,000
200,000 40,000 60,000 70,000 80,000 90,000 100,000
300,000 60,000 90,000 105,000 120,000 135,000 150,000
400,000 80,000 120,000 140,000 160,000 180,000 200,000
500,000 100,000 150,000 175,000 200,000 225,000 250,000
600,000 120,000 180,000 210,000 240,000 270,000 300,000
700,000 140,000 210,000 245,000 280,000 315,000 350,000
800,000 160,000 240,000 280,000 320,000 360,000 400,000
900,000 180,000 270,000 315,000 360,000 405,000 450,000
</TABLE>
The compensation covered by the Salaried Pension Plan and Supplemental
Retirement Benefit Plan is regular base salary, sales commissions, and
performance compensation. The compensation covered by the Salaried Pension Plan
and Supplemental Retirement Benefit Plan is the same as the amounts shown in the
salary and bonus columns of the Summary Compensation Table on page 8. Credited
service for pension benefit purposes for Messrs. Harnett, Waite, Harlan, Freeman
and Rozek is 18, 34, 18, 2 and 35 years, respectively. The Supplemental
Retirement Benefit Plan adds 14 years to Mr. Harnett's Brush Wellman Inc.
pension service. The amounts shown in the above table are computed on the basis
of a straight-life annuity (for the employee's life only) and are shown without
reduction for Social Security benefits or other offset amounts. The benefits
shown in the above table are subject to reductions based on Social Security
benefit amounts and, in the case of Mr. Harnett, for certain pension benefits
from previous employers.
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with certain senior
executives, including all of the executive officers named in the Summary
Compensation Table on page 8. These agreements provide certain benefits to the
senior executives in the event there is a change in control of the Company. The
material aspects of the employment agreements are summarized below.
In general, a change in control of the Company is deemed to have occurred
whenever:
(i) the Board of Directors fails to include a majority of directors
who are either "Original Directors" (those in office on February 20, 1989)
or "Approved Directors" (those who, after February 20, 1989, are elected,
or are nominated for election by the shareholders, by a vote of at least
two-thirds of the Original Directors and the Approved Directors, if any);
(ii) any "person" (as defined in Section 1701.01(G) of the Ohio
General Corporation Law) shall have accumulated shares exceeding specified
threshold levels (one-fifth, one-
14
<PAGE> 17
third or a majority) of the Company's voting power without first having
obtained the shareholder approval required by, and otherwise complied with,
the Ohio Control Share Acquisition Act (principally Section 1701.831 of the
Ohio General Corporation Law); or
(iii) the Board of Directors determines in good faith that (a) any
particular actual or proposed accumulation of Company shares, tender offer,
merger, consolidation, sale of assets, proxy contest or other event or
series of events will, or is likely to, if carried out, result in a
situation specified in (i) or (ii) above and (b) it is in the best
interests of the Company and its shareholders, and will serve the intended
purposes of the agreements, if the agreements thereupon become immediately
operative.
In the event of such a change in control, each executive will (if then an
employee of the Company) remain employed in substantially his then position for
four years or, if earlier, until the first to occur of the death of the
executive or his reaching age 65 (the "Window Period"). During the Window
Period, he will receive an annual amount at least equal to his salary rate in
effect at the beginning of the Window Period (or, if higher, his salary rate at
any time during the two full calendar years immediately preceding the change in
control) plus the highest incentive compensation award received by him in any of
the prior three years. In addition, he is entitled during the Window Period to
continue to participate in all Company benefit plans in which he was
participating and to receive all perquisites which were available to him (or to
other benefits and perquisites at the same level as those he enjoyed) at the
time of the change in control.
After a change in control, the executive may be terminated by the Company
for "cause" (the commission of a felony). If he is terminated without cause, or
if he terminates for any of the specified reasons described below, he will be
entitled to receive in a lump sum payment the present value of the remaining
aggregate direct remuneration (salary and incentive compensation) which would
otherwise have been paid to him for the remainder of the Window Period. The
Company is obligated to secure these payments through a trust to be funded at or
prior to the time of any change in control. The executive will also be entitled
in such a case to the continuation of benefits and perquisites. The agreements
include procedures intended to provide that none of the foregoing will
constitute "parachute payments" under Section 280G of the Internal Revenue Code
of 1986, as amended (the "Code"). In general, tax penalties would be imposed on
the executive and the Company if any of the foregoing were determined to
constitute parachute payments. The executive may terminate employment with the
Company and still be entitled to receive the payments specified above in the
event of: (a) his good faith determination that, due to changed circumstances
significantly affecting his position with the Company, he is unable to carry out
his duties and responsibilities; (b) any reduction in compensation or any
substantial reduction in position; or (c) any requirement that he have as his
principal office any place more than 50 miles from his principal residence at
the time of the change in control.
If the executive is terminated without cause, or if the executive
terminates for any of the reasons specified above, he is, in general, obligated
for a period of two years (or, if less, the balance of the Window Period) to use
reasonable efforts to seek other comparable employment. He is also generally
obligated to pay over to the Company 50% of all employment income from other
employers earned by him during that time and is subject for the same time to
specified prohibitions on competition.
The Company is obligated to pay all attorneys' and related fees and
expenses incurred by an executive as a result of the Company's failure to
perform its obligations under his agreement or as a result of specified
challenges to the validity or enforceability of, or the executive's performance
under, such agreement. This obligation of the Company must be secured by
insurance or as the Board of Directors otherwise determines.
15
<PAGE> 18
In determining whether the Window Period commences, the agreements continue
for five years. They will thereafter continue for successive two year increments
unless either the Company or the executive gives a specified notice to the
other.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. McInnes, a director of the Company, is a member of the Organization and
Compensation Committee and was Of Counsel to the law firm of Arter & Hadden
until November 1994. The Company retained Arter & Hadden as bond counsel and
Company counsel for the refunding of certain of the Company's Industrial Revenue
Bonds.
RELATED PARTY TRANSACTIONS
The Company has retained McDonald & Company Securities, Inc. as co-agent
with respect to a $75 million Medium-Term Note program. Mr. Carr, a director of
the Company, is Managing Director, Corporate Finance of McDonald & Company
Securities, Inc. The Company also retained the law firm of Arter & Hadden as
bond counsel and Company counsel for the refunding of certain of the Company's
Industrial Revenue Bonds. Mr. McInnes, a director of the Company, was Of Counsel
to Arter & Hadden until November 1994.
1995 STOCK INCENTIVE PLAN
GENERAL
The Board of Directors adopted the Brush Wellman Inc. 1995 Stock Incentive
Plan (the "Incentive Plan") on February 7, 1995, subject to approval by the
shareholders of the Company at the annual meeting. The Incentive Plan is
intended to align the Company's long-term management incentives more closely
with shareholder interests. The Incentive Plan affords the Organization and
Compensation Committee of the Board of Directors (the "Committee") the
flexibility to design stock-based incentives for the achievement of superior
results. Initial awards under the Incentive Plan have been designed to implement
the Company's transition from annual cash incentives to stock-based incentives
measured over 2 and 3 year periods (see "Incentive Plan Benefits" below).
The Incentive Plan authorizes the Committee to select from among five
categories of incentive awards: performance restricted shares ("Performance
Restricted Shares"), performance shares ("Performance Shares"), performance
units ("Performance Units"), restricted shares ("Restricted Shares") and options
to purchase Common Shares ("Option Rights"). The terms applicable to these
various types of awards, including those terms that may be established by the
Committee when making or administering particular awards, are set forth in
detail in the Incentive Plan.
The Incentive Plan is designed in part to replace the Company's 1979, 1984
and 1989 stock option plans (the "Prior Plans"). An aggregate of 228,565 shares
were available for grant under the Prior Plans as of February 7, 1995. However,
if the Incentive Plan is approved by the shareholders of the Company at the
annual meeting, no further stock awards will be made under the Prior Plans,
except to the extent that shares may become available for grant under the Prior
Plans by reason of termination of options previously granted. Moreover, the
Company's 1977 Stock Appreciation Rights Plan will be cancelled if the
shareholders approve the Incentive Plan.
Stock options for 1,532,860 shares previously granted under the Prior Plans
were outstanding as of February 7, 1995. The following table sets forth
additional information as to the stock
16
<PAGE> 19
options presently outstanding under the Prior Plans, which are held by
approximately 168 optionees, all of whom are or were officers or key employees
of the Company:
<TABLE>
<CAPTION>
OPTION GRANT DATE(1) SHARES OPTIONED OPTION PRICE
--------------------- --------------- ------------
<S> <C> <C>
April 2, 1985 28,500 $35.94
April 2, 1986 34,900 $38.75
April 7, 1987 49,500 $38.94
December 15, 1987 61,500 $22.06
April 6, 1988 5,000 $29.94
December 20, 1988 80,500 $25.50
April 24, 1989 2,000 $28.38
December 19, 1989 265,000 $20.88
January 2, 1990 25,000 $21.00
December 18, 1990 95,000 $14.50
January 22, 1991 100,000 $16.25
April 22, 1991 500 $17.25
December 16, 1991 99,600 $12.00
January 10, 1992 4,000 $14.00
July 28, 1992 3,000 $16.44
December 15, 1992 221,560 $15.31
December 20, 1993 241,600 $13.56
December 6, 1994 5,000 $13.56
December 20, 1994 210,700 $15.75
---------------
Total 1,532,860
================
<FN>
---------------
(1) All options expire no later than 10 years from date of grant.
</TABLE>
The option price with respect to the options reported above in each case
represents the average of the high and the low market price of the Common Shares
at the date of granting of the option.
SUMMARY OF THE PLAN
The following general description of certain features of the Incentive Plan
is qualified in its entirety by reference to the Incentive Plan, which is
attached as Appendix A.
ELIGIBILITY. Officers, including officers who are members of the Board of
Directors, and other key salaried employees of the Company and its Subsidiaries
may be selected by the Committee to receive benefits under the Incentive Plan.
INCENTIVE PLAN LIMITS. The maximum number of Common Shares that may be (i)
issued or transferred upon the exercise of Option Rights, (ii) awarded as
Performance Restricted Shares or Restricted Shares and released from substantial
risk of forfeiture thereof or (iii) issued or transferred in payment of
Performance Shares or Performance Units that have been earned, shall not in the
aggregate exceed 750,000 Common Shares, which may be shares of original issuance
or treasury shares or a combination thereof. However, the number of shares
awarded as Restricted Shares may not exceed 75,000 (excluding forfeitures).
These limits are subject to adjustments as provided in the Incentive Plan for
stock splits, stock dividends, recapitalizations and other similar transactions
or events.
Upon the payment of any option price by the transfer to the Company of
Common Shares or upon satisfaction of tax withholding obligations or any other
payment made or benefit realized under the Incentive Plan by the transfer or
relinquishment of Common Shares, there shall be deemed to have been issued or
transferred only the net number of shares actually issued or transferred by the
Company less the number of shares so transferred or relinquished. However, the
number of shares actually issued or transferred by the Company upon the exercise
of
17
<PAGE> 20
Incentive Stock Options shall not exceed 750,000, subject to adjustment as
provided for in the Incentive Plan. Upon the payment in cash of a benefit
provided by any award under the Incentive Plan, any Common Shares that were
covered by such award shall again be available for issuance or transfer under
the Incentive Plan.
The number of Performance Units granted under the Incentive Plan shall not
in the aggregate exceed 750,000. Performance Units that are granted under the
Incentive Plan and are paid in Common Shares or are not earned by a participant
at the end of a performance period are available for future grants of
Performance Units.
No participant shall receive in any one calendar year awards of Performance
Restricted Shares, Performance Shares and Performance Units having an aggregate
value as of their respective dates of grant in excess of $1,000,000. No
participant shall be granted Option Rights for more than 300,000 Common Shares
during any five consecutive calendar years, subject to adjustment pursuant to
the Incentive Plan.
PERFORMANCE RESTRICTED SHARES. An award of Performance Restricted Shares
involves the immediate transfer by the Company to a participant of ownership of
a specific number of Common Shares in consideration of the performance of
services. The participant is entitled immediately to voting, dividend and other
ownership rights in such shares. The transfer may be made without additional
consideration from the participant.
The Committee must specify Management Objectives (as discussed below)
which, if achieved, will result in termination or early termination of the
restrictions applicable to such shares. The Committee shall also specify in
respect of the specified Management Objectives, a minimum acceptable level of
achievement and must set forth a formula for determining the number of
Performance Restricted Shares on which restrictions will terminate if
performance is at or above the minimum level, but below full achievement of the
specified Management Objectives.
Performance Restricted Shares must be subject to a "substantial risk of
forfeiture" within the meaning of Section 83 of the Code for a period of at
least one year to be determined by the Committee on the date of the grant. To
enforce these forfeiture provisions, the transferability of Performance
Restricted Shares will be prohibited or restricted in a manner and to the extent
prescribed by the Committee for the period during which the forfeiture
provisions are to continue. The Committee may provide for a shorter period
during which the forfeiture provisions are to apply in the event of retirement,
death or disability or a Change in Control (as defined in the Incentive Plan) of
the Company.
PERFORMANCE SHARES AND PERFORMANCE UNITS. A Performance Share is the
equivalent of one Common Share and a Performance Unit is the equivalent of the
market value of one Common Share on the date of the grant. The participant will
be given one or more Management Objectives to meet within a specified period
(the "Performance Period"). The specified Performance Period may be subject to
earlier termination in the event of a Change in Control of the Company. A
minimum level of acceptable achievement will also be established by the
Committee. If by the end of the Performance Period, the participant has achieved
the specified Management Objectives, the participant will be deemed to have
fully earned the Performance Shares or Performance Units. If the participant has
not achieved the Management Objectives, but has attained or exceeded the
predetermined minimum level of acceptable achievement, the participant will be
deemed to have partly earned the Performance Shares or Performance Units in
accordance with a predetermined formula. To the extent earned, the Performance
Shares or Performance Units will be paid to the participant at the time and in
the manner determined by the Committee in cash, Common Shares or any combination
thereof.
RESTRICTED SHARES. An award of Restricted Shares involves the immediate
transfer by the Company to a participant of ownership of a specific number of
Common Shares in consideration
18
<PAGE> 21
of the performance of services. The participant is entitled immediately to
voting, dividend and other ownership rights in the shares. The transfer may be
made without additional consideration from the participant. As noted above, no
more than 75,000 shares may be awarded as Restricted Shares.
As are Performance Restricted Shares, Restricted Shares must be subject to
a "substantial risk of forfeiture" within the meaning of Section 83 of the Code
for a period to be determined by the Committee on the date of the grant. This
period may not be less than three years, except that the Committee may provide
for a shorter period in the event of retirement, death or disability or a Change
in Control of the Company.
OPTION RIGHTS. The Committee may grant Option Rights that entitle the
optionee to purchase Common Shares at a price equal to or greater than market
value on the date of grant. The option price is payable at the time of exercise
(i) in cash, (ii) by the transfer to the Company of nonforfeitable, unrestricted
Common Shares that are already owned by the optionee, (iii) with any other legal
consideration the Committee may deem appropriate or (iv) by any combination of
the foregoing methods of payment.
Payment of the option price of any Non-qualified Option may also be made in
whole or in part in the form of Restricted Shares or other Common Shares that
are subject to risk of forfeiture or restriction on transfer. When paid for with
such consideration, unless otherwise determined by the Committee on or after the
date of the grant, whenever Common Shares received by the optionee upon the
exercise of the Non-qualified Option is subject to the same risks of forfeiture
or restrictions on transfer as applied to the consideration surrendered by the
optionee. However, such risks of forfeiture and restriction on transfer shall
apply only to the same number of Common Shares received by the optionee as
applied to the forfeitable or restricted Common Shares surrendered by the
optionee.
The Committee has the authority to specify at the time Option Rights are
granted that the Common Shares will not be accepted in payment of the option
price until they have been owned by the optionee for a specified period;
however, the Incentive Plan does not require any such holding period and would
permit immediate sequential exchanges of Common Shares at the time of exercise
of Option Rights. Any grant of an Option Right may provide for deferred payment
of the option price from the proceeds of sale through a broker of some or all of
the Common Shares to which the exercise relates.
Option Rights granted under the Incentive Plan may be Option Rights that
are intended to qualify as "incentive stock options" within the meaning of
Section 422 of the Code or Option Rights that are not intended to so qualify or
combinations thereof.
Any grant of Option Rights may specify Management Objectives which, if
achieved, will result in exercisability of such rights. Successive grants may be
made to the same optionee regardless of whether Option Rights previously granted
to him or her remain unexercised. No Option Right may be exercised more than ten
years from the date of grant. Each grant must specify the period of continuous
employment with the Company or any subsidiary that is necessary before the
Option Rights will become exercisable and may provide for the earlier exercise
of the Option Rights in the event of a Change in Control of the Company.
TRANSFERABILITY. No Option Right or other "derivative security" within the
meaning of Rule 16b-3 under the Securities Exchange Act of 1934 (the "Exchange
Act") is transferable by a participant except by will or the laws of descent and
distribution. Option Rights may not be exercised during a participant's lifetime
except by the participant or, in the event of the participant's incapacity, by
the participant's guardian or legal representative acting in a fiduciary
capacity on behalf of the participant under state law and court supervision.
However, the Committee, in its sole discretion, may provide for the
transferability of particular awards under the Incentive Plan as long as such
provision will not disqualify the exemption for other awards under Rule 16b-3.
19
<PAGE> 22
The Committee may specify at the date of grant that all or any part of the
Common Shares that are to be issued or transferred by the Company upon the
exercise of Option Rights or upon payment under any grant of Performance Shares
or Performance Units, or are to be no longer subject to the substantial risk of
forfeiture and restrictions on transfer referred to in Section 5 of the
Incentive Plan with respect to Restricted Shares, shall be subject to further
restrictions on transfer.
MANAGEMENT OBJECTIVES. The Incentive Plan requires that the Committee
establish "Management Objectives" for purposes of Performance Restricted Shares,
Performance Shares or Performance Units. When so determined by the Committee,
Option Rights may also specify Management Objectives. Management Objectives may
be described in terms of either Company-wide objectives or objectives that are
related to the performance of the individual participant or subsidiary,
division, department or function within the Company or a subsidiary in which the
participant is employed. Management Objectives applicable to any award to a
participant who is, or is determined by the Committee likely to become, a
"covered employee" within the meaning of 162(m)(3) of the Code shall be limited
to specified levels of or growth in (i) return on invested capital, (ii) return
on equity, (iii) return on operating assets, (iv) earnings per share and/or (v)
market value per share. Except in the case of such a covered employee, if the
Committee determines that a change in the business, operations, corporate
structure or capital structure of the Company, or the manner in which it
conducts its business, or other events or circumstances render the Management
Objectives unsuitable, the Committee may modify such Management Objectives, in
whole or in part, as the Committee deems appropriate and equitable.
ADMINISTRATION AND AMENDMENTS. The Incentive Plan is to be administered by
a committee consisting of not less than three nonemployee directors who are
"disinterested persons" within the meaning of Rule 16b-3 under the Exchange Act.
In connection with its administration of the Incentive Plan, the Committee is
authorized to interpret the Incentive Plan and related agreements and other
documents. The Committee may make grants to participants under any or a
combination of all of the various categories of awards that are authorized under
the Incentive Plan and may condition the grant of awards on the surrender or
deferral by the participant of the participant's right to receive a cash bonus
or other compensation otherwise payable by the Company or a subsidiary to the
participant. The Committee may delegate its authority to officers of the Company
and its subsidiaries in certain circumstances.
The Incentive Plan may be amended from time to time by the Board of
Directors, but without further approval by the shareholders of the Company,
except no such amendment may (i) increase the aggregate number of Common Shares
that may be issued or transferred and covered by outstanding awards, increase
the aggregate number of Performance Units that may be granted, or increase the
number of shares which may be granted to any participant in any one or three
fiscal years, or (ii) otherwise cause Rule 16b-3 under the Exchange Act to cease
to be applicable to the Plan.
The Committee shall not, without the further approval of the Shareholders
of the Company, authorize the amendment of any outstanding Option Right to
reduce the option price. Furthermore, no Option Rights shall be cancelled and
replaced with awards having a lower option price without the further approval of
the shareholders of the Company.
INCENTIVE PLAN BENEFITS
It is not possible to determine the specific amounts that may be awarded to
various individuals in the future under the Incentive Plan. However, subject to
approval of the Incentive Plan by the shareholders at the annual meeting, the
Committee has made awards of Performance Restricted Shares and Performance
Shares to certain executive officers named in the Summary Compensation Table and
certain other key employees for the year 1995.
20
<PAGE> 23
The table below reflects these awards for 1995. For any of the awards of
Performance Restricted Shares to vest at the end of the two-year performance
period, (1) the grantee must have remained in the continuous employ of the
Company or one of its subsidiaries during the performance period and (2) the
Company's Management Objectives must have at least been attained at the target
level of achievement. If the level attained is between threshold and target, the
number of Performance Restricted Shares to vest will be mathematically
interpolated.
The awards of Performance Shares shown in the table will only result in the
issuance of Common Shares after the completion of the performance period and
only if (1) the grantee shall have remained in the continuous employ of the
Company or a subsidiary throughout the period and (2) the Management Objectives
have been at least attained at the maximum level of achievement. If the level
attained is between target and maximum, a portion will be earned based on
mathematical interpolation.
All awards presented in the table are subject to the attainment of return
on invested capital (or return on assets for certain employees of wholly owned
subsidiaries) over the two-year period beginning 1995. It is expected that
future awards will be based on attainment of Management Objectives measured over
a three-year period.
<TABLE>
NEW PLAN BENEFITS TABLE
<CAPTION>
PERFORMANCE
RESTRICTED PERFORMANCE
SHARES SHARES(1)
-------------------- --------------------
DOLLAR DOLLAR
NAME AND POSITION VALUE(2) SHARES VALUE(2) SHARES
------------------------------------------------- -------- ------- -------- -------
<S> <C> <C> <C> <C>
Gordon D. Harnett................................ $180,000 10,909 $ 90,000 5,455
Chairman of the Board, President and Chief
Executive Officer
Clark G. Waite................................... $ -0- $ -0-
Senior Vice President (3)
Craig B. Harlan.................................. $ 58,100 3,521 $ 29,050 1,761
Vice President International -- Europe
Stephen Freeman.................................. $ 56,700 3,436 $ 28,350 1,718
Vice President Alloy Products
Robert H. Rozek.................................. $ 50,750 3,076 $ 25,375 1,538
Senior Vice President International and
Beryllium Products
Executive Group.................................. $525,731 31,863 $262,866 15,931
Non-Executive Director Group..................... $ -0- $ -0-
Non-Executive Officer............................ $724,680 43,920 $362,340 21,960
Employee Group
<FN>
---------------
(1) Each Performance Share is the equivalent of one Common Share.
(2) The dollar values shown are based on the market price of the Company's
Common Shares on February 7, 1995.
(3) Mr. Waite retired as an officer of the Company effective January 31, 1995.
</TABLE>
FEDERAL INCOME TAX CONSEQUENCES
The following is a brief summary of certain of the federal income tax
consequences of certain transactions under the Incentive Plan based on federal
income tax laws in effect on
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<PAGE> 24
January 1, 1995. This summary is not intended to be exhaustive and does not
describe state or local tax consequences.
Tax Consequences to Participants.
PERFORMANCE RESTRICTED SHARES. A recipient of Performance Restricted Shares
generally will be subject to tax at ordinary income rates on the fair market
value of the Performance Restricted Shares reduced by any amount paid by the
recipient at such time as the shares are no longer subject to a risk of
forfeiture or restrictions on transfer for purposes of Section 83 of the Code.
However, a recipient who so elects under Section 83(b) of the Code within 30
days of the date of transfer of the shares will have taxable ordinary income on
the date of transfer of the shares equal to the excess of the fair market value
of the shares (determined without regard to the risk of forfeiture or
restrictions on transfer) over any purchase price paid for the shares. If a
Section 83(b) election has not been made, any dividends received with respect to
Performance Restricted Shares that are subject at that time to a risk of
forfeiture or restrictions on transfer generally will be treated as compensation
that is taxable as ordinary income to the recipient.
PERFORMANCE SHARES AND PERFORMANCE UNITS. No income generally will be
recognized upon the grant of Performance Shares or Performance Units. Upon
payment in respect of the earn-out of Performance Shares or Performance Units,
the recipient generally will be required to include as taxable ordinary income
in the year of receipt an amount equal to the amount of cash received and the
fair market value of any nonrestricted shares of Common Stock received.
RESTRICTED SHARES. A recipient of Restricted Shares will be taxed in a
manner substantially similar to that described above in the case of a recipient
of Performance Restricted Shares.
NON-QUALIFIED OPTION RIGHTS. In general: (i) no income will be recognized
by an optionee at the time a non-qualified Option Right is granted; (ii) at the
time of exercise of a non-qualified Option Right, ordinary income will be
recognized by the optionee in an amount equal to the difference between the
option price paid for the shares and the fair market value of the shares if they
are nonrestricted on the date of exercise; and (iii) at the time of sale of
shares acquired pursuant to the exercise of a non-qualified Option Right, any
appreciation (or depreciation) in the value of the shares after the date of
exercise will be treated as either short-term or long-term capital gain (or
loss) depending on how long the shares have been held.
INCENTIVE STOCK OPTIONS. No income generally will be recognized by an
optionee upon the grant or exercise of an Incentive Stock Option. If Common
Shares are issued to an optionee pursuant to the exercise of an Incentive Stock
Option and no disqualifying disposition of the shares is made by the optionee
within two years after the date of grant or within one year after the transfer
of the shares to the optionee, then upon the sale of the shares any amount
realized in excess of the option price will be taxed to the optionee as
long-term capital gain and any loss sustained will be a long-term capital loss.
If Common Shares acquired upon the exercise of an Incentive Stock Option
are disposed of prior to the expiration of either holding period described
above, the optionee generally will recognize ordinary income in the year of
disposition in an amount equal to any excess of the fair market value of the
shares at the time of exercise (or, if less, the amount realized on the
disposition of the shares in a sale or exchange) over the option price paid for
the shares. Any further gain (or loss) realized by the optionee generally will
be taxed as short-term or long-term capital gain (or loss) depending on the
holding period.
SPECIAL RULES APPLICABLE TO OFFICERS AND DIRECTORS. In limited
circumstances where the sale of stock that is received as the result of a grant
of an award could subject an officer or director to suit under Section 16(b) of
the Exchange Act, the tax consequences to the officer or director may differ
from the tax consequences described above. In these circumstances, unless a
special election has been made, the principal difference usually will be to
postpone valuation and
22
<PAGE> 25
taxation of the stock received so long as the sale of the stock received could
subject the Officer or Director to suit under Section 16(b) of the Exchange Act,
but not longer than six months.
Tax Consequences to the Company or Subsidiary.
To the extent that a participant recognizes ordinary income in the
circumstances described above, the Company or subsidiary for which the
participant performs services will be entitled to a corresponding deduction
provided that, among other things, the income meets the test of reasonableness,
is an ordinary and necessary business expense and is not an "excess parachute
payment" within the meaning of Section 280G of the Code and is not disallowed by
the $1 million limitation on certain executive compensation.
RECOMMENDATION
A favorable vote of the majority of votes cast on the matter is necessary
for approval of the Incentive Plan. In addition, the affirmative vote of a
majority of Common Shares of the Company present, or represented, and entitled
to vote on the matter at the Annual Meeting is necessary for purposes of Rule
16b-3 under the Exchange Act. Abstentions will be considered entitled to vote on
the matter for purposes of Rule 16b-3 and broker non-votes will not. The Board
of Directors believes that the approval of the Incentive Plan is in the best
interests of the Company and the shareholders because the Incentive Plan will
enable the Company to provide competitive equity incentives to officers and
other key salaried employees to enhance the profitability of the Company and
increase shareholder value.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE INCENTIVE
PLAN.
APPOINTMENT OF AUDITORS
The Board of Directors recommends ratification and approval of the
appointment of Ernst & Young LLP, independent auditors, to audit the books and
accounts of the Company for the year 1995. This proposal will be approved if a
majority of the votes cast on this proposal at the annual meeting are in favor
of the proposal.
It is expected that a representative of Ernst & Young will attend the
meeting, with the opportunity to make a statement if he so desires and will be
available to answer appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
SUBMISSION OF SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the annual meeting of
shareholders in 1996 must be received by the Company at 17876 St. Clair Avenue,
Cleveland, Ohio, 44110, Attention: Secretary for inclusion in the Company's
proxy statement and form of proxy for that meeting not later than November 10,
1995.
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<PAGE> 26
GENERAL
The Company does not know of any matters to be brought before the meeting
except as indicated in the notice. However, if any other matters properly come
before the meeting for action, it is intended that the person authorized under
solicited proxies may vote or act thereon in accordance with his own judgment.
By order of the Board of Directors.
BRUSH WELLMAN INC.
MICHAEL C. HASYCHAK
Secretary
Cleveland, Ohio
March 13, 1995
24
<PAGE> 27
APPENDIX A
BRUSH WELLMAN INC.
1995 STOCK INCENTIVE PLAN
1. PURPOSE. The purpose of this Plan is to attract and retain officers and
other key salaried employees of Brush Wellman Inc. (the "Corporation") and its
Subsidiaries and to provide such persons with incentives and rewards for
superior performance.
2. DEFINITIONS. As used in this Plan,
"BOARD" means the Board of Directors of the Corporation.
A "CHANGE IN CONTROL" of the Corporation shall have occurred if any of the
following events shall occur:
(a) The Board at any time shall fail to include a majority of
Directors who are either "Original Directors" or "Approved Directors". An
Original Director is a Director who is serving on February 7, 1995. An
Approved Director is a Director who, after such date, is elected, or is
nominated for election by the shareholders, by a vote of at least
two-thirds of the Original Directors and the previously elected Approved
Directors, if any.
(b) Any person (as the term "person" is defined in Section 1701.01(G)
of the Ohio Revised Code) shall have made a "control share acquisition" (as
the term "control share acquisition" is defined in Section 1701.01(Z) of
the Ohio Revised Code) of shares of the Corporation without having first
complied with Section 1701.831 of the Ohio Revised Code (dealing with
control share acquisitions).
(c) The Board shall at any time determine in the good faith exercise
of its judgment that (i) any particular actual or proposed accumulation of
shares of the Corporation, tender offer for shares of the Corporation,
merger, consolidation, sale of assets, proxy contest, or other transaction
or event or series of transactions or events will, or is likely to, if
carried out, result in a Change in Control falling within paragraph (a) or
(b) above and (ii) it is in the best interests of the Corporation and its
shareholders, and will serve the intended purposes of this Plan, if such
transaction or event or series of transactions or events is deemed to be a
Change in Control.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
"COMMITTEE" means the committee described in Section 15(a) of this Plan.
"COMMON SHARES" means (i) Common Shares of the par value of $1 per share of
the Corporation and (ii) any security into which Common Shares may be converted
by reason of any transaction or event of the type referred to in Section 9 of
this Plan.
"DATE OF GRANT" means the date specified by the Committee on which a grant
of Performance Restricted Shares, Performance Shares or Performance Units,
Restricted Shares or Option Rights shall become effective, which shall not be
earlier than the date on which the Committee takes action with respect thereto.
"DESIGNATED SUBSIDIARY" means a subsidiary that is (i) not a corporation or
(ii) a corporation in which at the time the Corporation owns or controls,
directly or indirectly, less than 80 percent of the total combined voting power
represented by all classes of stock issued by such corporation.
"INCENTIVE STOCK OPTION" means an Option Right that is intended to qualify
as an "incentive stock option" under Section 422 of the Code or any successor
provision thereto.
"MANAGEMENT OBJECTIVES" means the achievement of a performance objective or
objectives established pursuant to this Plan for Participants who have received
grants of Perform-
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<PAGE> 28
ance Restricted Shares, Performance Shares or Performance Units or, when so
determined by the Committee, Option Rights. Management Objectives may be
described in terms of Corporation-wide objectives or objectives that are related
to the performance of the individual Participant or the Subsidiary, division,
department or function within the Corporation or Subsidiary in which the
Participant is employed. The Management Objectives applicable to any award to a
Participant who is, or is determined by the Committee to be likely to become, a
"covered employee" within the meaning of Section 162(m) of the Code (or any
successor provision) shall be limited to specified levels of or growth in:
<TABLE>
<C> <S>
(i) return on invested capital;
(ii) return on equity;
(iii) return on operating assets;
(iv) earnings per share; and/or
(v) market value per share.
</TABLE>
Except in the case of such a covered employee, if the Committee determines that
a change in the business, operations, corporate structure or capital structure
of the Corporation, or the manner in which it conducts its business, or other
events or circumstances render the Management Objectives unsuitable, the
Committee may modify such Management Objectives or the related minimum
acceptable level of achievement, in whole or in part, as the Committee deems
appropriate and equitable.
"MARKET VALUE PER SHARE" means the fair market value of the Common Shares
as determined by the Committee from time to time.
"NONQUALIFIED OPTION" means an Option Right that is not intended to qualify
as a Tax-qualified Option.
"OPTIONEE" means the person so designated in an agreement evidencing an
outstanding Option Right.
"OPTION PRICE" means the purchase price payable upon the exercise of an
Option Right.
"OPTION RIGHT" means the right to purchase Common Shares from the
Corporation upon the exercise of a Nonqualified Option or a Tax-qualified Option
granted pursuant to Section 7 of this Plan.
"PARTICIPANT" means a person who is selected by the Committee to receive
benefits under this Plan and (i) is at that time an officer, including without
limitation an officer who may also be a member of the Board, or other salaried
employee of the Corporation or any Subsidiary or (ii) has agreed to commence
serving in any such capacity.
"PERFORMANCE PERIOD" means, in respect of a Performance Share or
Performance Unit, a period of time established pursuant to Section 5 of this
Plan within which the Management Objective relating thereto is to be achieved.
"PERFORMANCE RESTRICTED SHARES" means Common Shares granted pursuant to
Section 4 of this Plan as to which neither substantial risk of forfeiture nor
the restrictions on transfer referred to in such Section 4 has expired.
"PERFORMANCE SHARE" means a bookkeeping entry that records the equivalent
of one Common Share and is awarded pursuant to Section 5 of this Plan.
"PERFORMANCE UNIT" means a bookkeeping entry that records a unit equivalent
to the Market Value per Share of one Common Share on the Date of Grant and is
awarded pursuant to Section 5 of this Plan.
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<PAGE> 29
"RESTRICTED SHARES" means Common Shares granted pursuant to Section 6 of
this Plan as to which neither the substantial risk of forfeiture nor the
restrictions on transfer referred to in such Section 6 has expired. Restricted
shares are not subject to Management Objectives specified by the Committee.
"RULE 16B-3" means Rule 16b-3, as promulgated and amended from time to time
by the Securities and Exchange Commission under the Securities Exchange Act of
1934, or any successor rule to the same effect.
"SUBSIDIARY" means a corporation, partnership, joint venture,
unincorporated association or other entity in which the Corporation has a direct
or indirect ownership or other equity interest; provided, however, that for
purposes of determining whether any person may be a Participant for purposes of
any grant of Incentive Stock Options, "Subsidiary" means any corporation in
which the Corporation owns or controls directly or indirectly more than 50
percent of the total combined voting power represented by all classes of stock
issued by such corporation at the time of the grant.
"TAX-QUALIFIED OPTION" means an Option Right that is intended to qualify
under particular provisions of the Code, including without limitation an
Incentive Stock Option.
3. SHARES AND PERFORMANCE UNITS AVAILABLE UNDER THE PLAN. (a) Subject to
adjustment as provided in Section 9 of this Plan, the number of Common Shares
which may be (i) issued or transferred upon the exercise of Option Rights, (ii)
awarded as Restricted Shares or Performance Restricted Shares and released from
substantial risk of forfeiture thereof or (iii) issued or transferred in payment
of Performance Shares or Performance Units that have been earned, shall not in
the aggregate exceed 750,000 Common Shares, which may be Common Shares of
original issuance or Common Shares held in treasury or a combination thereof;
provided, however, that the number of Restricted Shares shall not in the
aggregate exceed 75,000 (excluding any forfeitures), subject to adjustment as
provided in Section 9 of this Plan.
(b) Upon the full or partial payment of any Option Price by the transfer to
the Corporation of Common Shares or upon satisfaction of tax withholding
obligations in connection with any such exercise or any other payment made or
benefit realized under this Plan by the transfer or relinquishment of Common
Shares, there shall be deemed to have been issued or transferred under this Plan
only the net number of Common Shares actually issued or transferred by the
Corporation less the number of Common Shares so transferred or relinquished;
provided, however, that the number of Common Shares actually issued or
transferred by the Corporation upon the exercise of Incentive Stock Options
shall not exceed the number of Common Shares first specified above in Section
3(a), subject to adjustment as therein provided.
(c) Upon payment in cash of the benefit provided by any award granted under
this Plan, any Common Shares that were covered by that award shall again be
available for issuance or transfer hereunder.
(d) The number of Performance Units that may be granted under this Plan
shall not in the aggregate exceed 750,000. Performance Units that are granted
under this Plan and are paid in Common Shares or are not earned by the
Participant at the end of the Performance Period shall be available for future
grants of Performance Units hereunder.
(e) Notwithstanding any other provision of this Plan to the contrary, in no
event shall any Participant in any period of one calendar year receive awards of
Performance Restricted Shares, Performance Shares and Performance Units having
an aggregate value as of their respective Dates of Grant in excess of
$1,000,000.
(f) Notwithstanding any other provision of this Plan to the contrary, no
Participant shall be granted Option Rights for more than 300,000 Common Shares
during any period of five consecutive calendar years, subject to adjustment as
provided in Section 9 of this Plan.
A-3
<PAGE> 30
4. PERFORMANCE RESTRICTED SHARES. The Committee may also authorize grants
to Participants of Performance Restricted Shares upon such terms and conditions
as the Committee may determine in accordance with the following provisions:
(a) Each grant shall constitute an immediate transfer of the ownership
of Common Shares to the Participant in consideration of the performance of
services, entitling such Participant to dividend, voting and other
ownership rights, subject to the substantial risk of forfeiture and
restrictions on transfer hereinafter referred to.
(b) Any grant of Performance Restricted Shares shall specify
Management Objectives which, if achieved, will result in termination or
early termination of the restrictions applicable to such Shares and each
grant shall specify in respect of the specified Management Objectives, a
minimum acceptable level of achievement and shall set forth a formula for
determining the number of Performance Restricted Shares on which
restrictions will terminate if performance is at or above the minimum
level, but falls short of full achievement of the specified Management
Objectives; provided, however, that no such termination shall occur less
than one year after the Date of Grant, except in the event of retirement,
death or disability of the Participant or a Change in Control of the
Corporation.
(c) Each grant may be made without payment of additional consideration
from the Participant.
(d) Each grant shall provide that the Performance Restricted Shares
covered thereby shall be subject to a "substantial risk of forfeiture"
within the meaning of Section 83 of the Code for a period to be determined
by the Committee on the Date of Grant, and any grant may provide for the
earlier termination of such period in the event of retirement, death or
disability of the Participant or a Change in Control of the Corporation or
other similar transaction or event.
(e) Each grant shall provide that, during the period for which such
substantial risk of forfeiture is to continue, the transferability of the
Performance Restricted Shares shall be prohibited or restricted in the
manner and to the extent prescribed by the Committee on the Date of Grant.
Such restrictions may include without limitation rights of repurchase or
first refusal in the Corporation or provisions subjecting the Performance
Restricted Shares to a continuing substantial risk of forfeiture in the
hands of any transferee.
(f) Any grant or sale may require that any or all dividends or other
distributions paid on the Performance Restricted Shares during the period
of such restrictions be automatically sequestered. Such distribution may be
reinvested on an immediate or deferred basis in additional Common Shares,
which may be subject to the same restrictions as the underlying award or
such other restrictions as the Committee may determine.
(g) Each grant shall be evidenced by an agreement, which shall be
executed on behalf of the Corporation by any officer thereof and delivered
to and accepted by the Participant and shall contain such terms and
provisions as the Committee may determine consistent with this Plan. Unless
otherwise directed by the Committee, all certificates representing
Performance Restricted Shares, together with a stock power that shall be
endorsed in blank by the Participant with respect to the Performance
Restricted Shares, shall be held in custody by the Corporation until all
restrictions thereon lapse.
5. PERFORMANCE SHARES AND PERFORMANCE UNITS. The Committee may also
authorize grants of Performance Shares and Performance Units, which shall become
payable to the Participant upon the achievement of specified Management
Objectives, upon such terms and conditions as the Committee may determine in
accordance with the following provisions:
(a) Each grant shall specify the number of Performance Shares or
Performance Units to which it pertains, which may be subject to adjustment
to reflect changes in compensation or other factors.
A-4
<PAGE> 31
(b) The Performance Period with respect to each Performance Share or
Performance Unit shall be determined by the Committee on the Date of Grant
and may be subject to earlier termination in the event of a Change in
Control of the Corporation.
(c) Each grant shall specify the Management Objectives that are to be
achieved by the Participant and each grant shall specify in respect of the
specified Management Objectives a minimum acceptable level of achievement
below which no payment will be made and shall set forth a formula for
determining the amount of any payment to be made if performance is at or
above the minimum acceptable level, but falls short of full achievement of
the specified Management Objective.
(d) Each grant shall specify the time and manner of payment of
Performance Shares or Performance Units that shall have been earned, and
any grant may specify that any such amount may be paid by the Corporation
in cash, Common Shares or any combination thereof and may either grant to
the Participant or reserve to the Committee the right to elect among those
alternatives.
(e) Any grant of Performance Shares or Performance Units may specify
that the amount payable, or the number of Common Shares issued, with
respect thereto may not exceed maximums specified by the Committee on the
Date of Grant.
(f) Any grant of Performance Shares may provide for the payment to the
Participant of dividend equivalents thereon in cash or additional Common
Shares on a current, deferred or contingent basis.
(g) Each grant shall be evidenced by an agreement, which shall be
executed on behalf of the Corporation by any officer thereof and delivered
to and accepted by the Participant and shall contain such terms and
provisions as the Committee may determine consistent with this Plan.
6. RESTRICTED SHARES. The Committee may also authorize grants to
Participants of Restricted Shares upon such terms and conditions as the
Committee may determine in accordance with the following provisions:
(a) Each grant shall constitute an immediate transfer of the ownership
of Common Shares to the Participant in consideration of the performance of
services, entitling such Participant to dividend, voting and other
ownership rights, subject to the substantial risk of forfeiture and
restrictions on transfer hereinafter referred to.
(b) Each grant may be made without payment of additional consideration
from the Participant.
(c) Each grant shall provide that the Restricted Shares covered
thereby shall be subject to a "substantial risk of forfeiture" within the
meaning of Section 83 of the Code for a period of at least three years to
be determined by the Committee on the Date of Grant, and any grant may
provide for the earlier termination of such period in the event of
retirement, death or disability of the Participant or a Change in Control
of the Corporation.
(d) Each grant shall provide that, during the period for which such
substantial risk of forfeiture is to continue, the transferability of the
Restricted Shares shall be prohibited or restricted in the manner and to
the extent prescribed by the Committee on the Date of Grant. Such
restrictions may include without limitation rights of repurchase or first
refusal in the Corporation or provisions subjecting the Restricted Shares
to a continuing substantial risk of forfeiture in the hands of any
transferee.
(e) Any grant may require that any or all dividends or other
distributions paid on the Restricted Shares during the period of such
restrictions be automatically sequestered. Such distribution may be
reinvested on an immediate or deferred basis in additional Common Shares,
which may be subject to the same restrictions as the underlying award or
such other restrictions as the Committee may determine.
A-5
<PAGE> 32
(f) Each grant shall be evidenced by an agreement, which shall be
executed on behalf of the Corporation by any officer thereof and delivered
to and accepted by the Participant and shall contain such terms and
provisions as the Committee may determine consistent with this Plan. Unless
otherwise directed by the Committee, all certificates representing
Restricted Shares, together with a stock power that shall be endorsed in
blank by the Participant with respect to the Restricted Shares, shall be
held in custody by the Corporation until all restrictions thereon lapse.
7. OPTION RIGHTS. The Committee may from time to time authorize grants to
Participants of options to purchase Common Shares upon such terms and conditions
as the Committee may determine in accordance with the following provisions:
(a) Each grant of Option Rights shall specify the number of Common
Shares to which it pertains.
(b) Each grant shall specify an Option Price per Common Share, which
shall be equal to or greater than the Market Value per Share on the Date of
Grant.
(c) Each grant shall specify the form of consideration to be paid in
satisfaction of the Option Price and the manner of payment of such
consideration, which may include (i) cash in the form of currency or check
or other cash equivalent acceptable to the Corporation, (ii)
nonforfeitable, unrestricted Common Shares, which are already owned by the
Optionee and have a value at the time of exercise that is equal to the
Option Price, (iii) any other legal consideration that the Committee may
deem appropriate, including without limitation any form of consideration
authorized under Section 7(d) below, on such basis as the Committee may
determine in accordance with this Plan and (iv) any combination of the
foregoing.
(d) Any grant of a Nonqualified Option may provide that payment of the
Option Price may also be made in whole or in part in the form of Restricted
Shares or other Common Shares that are subject to risk of forfeiture or
restrictions on transfer. Unless otherwise determined by the Committee on
or after the Date of Grant, whenever any Option Price is paid in whole or
in part by means of any of the forms of consideration specified in this
Section 7(d), the Common Shares received by the Optionee upon the exercise
of the Nonqualified Option shall be subject to the same risks of forfeiture
or restrictions on transfer as those that applied to the consideration
surrendered by the Optionee; provided, however, that such risks of
forfeiture and restrictions on transfer shall apply only to the same number
of Common Shares received by the Optionee as applied to the forfeitable or
restricted Common Shares surrendered by the Optionee.
(e) Any grant may provide for deferred payment of the Option Price
from the proceeds of sale through a broker of some or all of the Common
Shares to which the exercise relates.
(f) Successive grants may be made to the same Optionee regardless of
whether any Option Rights previously granted to the Optionee remain
unexercised.
(g) Each grant shall specify the period or periods of continuous
employment of the Optionee by the Corporation or any Subsidiary that are
necessary before the Option Rights or installments thereof shall become
exercisable, and any grant may provide for the earlier exercise of the
Option Rights in the event of a Change in Control of the Corporation.
(h) Option Rights granted pursuant to this Section 7 may be
Nonqualified Options or Tax-qualified Options or combinations thereof.
(i) Any grant of Option Rights may specify Management Objectives
which, if achieved, will result in exercisability of such rights.
(j) No Option Right granted pursuant to this Section 7 may be
exercised more than 10 years from the Date of Grant; subject to this limit,
the Committee may cause Option Rights
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<PAGE> 33
to continue to be exercisable after termination of employment of the
Participant under circumstances specified by the Committee.
(k) Each grant shall be evidenced by an agreement, which shall be
executed on behalf of the Corporation by any officer thereof and delivered
to and accepted by the Optionee and shall contain such terms and provisions
as the Committee may determine consistent with this Plan.
8. TRANSFERABILITY. (a) No Option Right or other derivative security (as
that term is defined in Rule 16b-3) granted under this Plan may be transferred
by a Participant except by will or the laws of descent and distribution. Option
Rights granted under this Plan may not be exercised during a Participant's
lifetime except by the Participant or, in the event of the Participant's legal
incapacity, by his guardian or legal representative acting in a fiduciary
capacity on behalf of the Participant under state law and court supervision.
Notwithstanding the foregoing, the Committee, in its sole discretion, may
provide for the transferability of particular awards under this Plan so long as
such provisions will not disqualify the exemption for other awards under Rule
16b-3.
(b) Any grant made under this Plan may provide that all or any part of the
Common Shares that are to be issued or transferred by the Corporation upon the
exercise of Option Rights or in payment of Performance Shares or Performance
Units, or are no longer subject to the substantial risk of forfeiture and
restrictions on transfer referred to in Sections 4 and 6 of this Plan, shall be
subject to further restrictions upon transfer.
9. ADJUSTMENTS. The Committee may make or provide for such adjustments in
the number of Common Shares covered by outstanding Option Rights and Performance
Shares granted hereunder, the Option Prices per Common Share and the kind of
shares (including shares of another issuer) covered thereby, as the Committee
may in good faith determine to be equitably required in order to prevent
dilution or expansion of the rights of Participants that otherwise would result
from (a) any stock dividend, stock split, combination of shares,
recapitalization or other change in the capital structure of the Corporation or
(b) any merger, consolidation, spin-off, reorganization, partial or complete
liquidation or other distribution of assets, issuance of warrants or other
rights to purchase securities or any other corporate transaction or event having
an effect similar to any of the foregoing. In the event of any such transaction
or event, the Committee may provide in substitution for any or all outstanding
awards under this Plan such alternative consideration as it may in good faith
determine to be equitable under the circumstances and may require in connection
therewith the surrender of all awards so replaced. Moreover, the Committee may
on or after the Date of Grant provide in the agreement evidencing any award
under this Plan that the holder of the award may elect to receive an equivalent
award in respect of securities of the surviving entity of any merger,
consolidation or other transaction or event having a similar effect, or the
Committee may provide that the holder will automatically be entitled to receive
such an equivalent award. The Committee may also make or provide for such
adjustments in the maximum numbers of Common Shares and Restricted Shares
specified in Section 3(a) of this Plan, the maximum number of Performance Units
specified in Section 3(d) of this Plan and the maximum number of Common Shares
specified in Section 3(f) of this Plan as the Committee may in good faith
determine to be appropriate in order to reflect any transaction or event
described in this Section 9. This Section 9 shall not be construed to permit the
re-pricing of any Option Rights in the absence of any of the circumstances
described above in contravention of Section 16(b) hereof.
10. FRACTIONAL SHARES. The Corporation shall not be required to issue any
fractional Common Shares pursuant to this Plan. The Committee may provide for
the elimination of fractions or for the settlement thereof in cash.
11. WITHHOLDING TAXES. To the extent that the Corporation is required to
withhold federal, state, local or foreign taxes in connection with any payment
made or benefit realized by
A-7
<PAGE> 34
a Participant or other person under this Plan, and the amounts available to the
Corporation for the withholding are insufficient, it shall be a condition to the
receipt of any such payment or the realization of any such benefit that the
Participant or such other person make arrangements satisfactory to the
Corporation for payment of the balance of any taxes required to be withheld. At
the discretion of the Committee, any such arrangements may without limitation
include relinquishment of a portion of any such payment or benefit or the
surrender of outstanding Common Shares. The Corporation and any Participant or
such other person may also make similar arrangements with respect to the payment
of any taxes with respect to which withholding is not required.
12. PARTICIPATION BY EMPLOYEES OF DESIGNATED SUBSIDIARIES. As a condition
to the effectiveness of any grant or award to be made hereunder to a Participant
who is an employee of a Designated Subsidiary, whether or not such Participant
is also employed by the Corporation or another Subsidiary, the Board may require
such Designated Subsidiary to agree to transfer to such employee (when, as and
if provided for under this Plan and any applicable agreement entered into with
any such employee pursuant to this Plan) the Common Shares that would otherwise
be delivered by the Corporation, upon receipt by such Designated Subsidiary of
any consideration then otherwise payable by such Participant to the Corporation.
Any such award shall be evidenced by an agreement between the Participant and
the Designated Subsidiary, in lieu of the Corporation, on terms consistent with
this Plan and approved by the Board and such Designated Subsidiary. All such
Common Shares so delivered by or to a Designated Subsidiary shall be treated as
if they had been delivered by or to the Corporation for purposes of Section 3 of
this Plan, and all references to the Corporation in this Plan shall be deemed to
refer to such Designated Subsidiary, except for purposes of the definition of
"Board" and except in other cases where the context otherwise requires.
13. FOREIGN EMPLOYEES. In order to facilitate the making of any grant or
combination of grants under this Plan, the Board may provide for such special
terms for awards to Participants who are foreign nationals or who are employed
by the Corporation or any Subsidiary or Designated Subsidiary outside of the
United States of America as the Board may consider necessary or appropriate to
accommodate differences in local law, tax policy or custom. Moreover, the Board
may approve such supplements to or amendments, restatements or alternative
versions of this Plan as it may consider necessary or appropriate for such
purposes, without thereby affecting the terms of this Plan as in effect for any
other purpose, and the Secretary or other appropriate officer of the Corporation
may certify any such document as having been approved and adopted in the same
manner as this Plan. No such special terms, supplements, amendments or
restatements, however, shall include any provisions that are inconsistent with
the terms of this Plan as then in effect unless this Plan could have been
amended to eliminate such inconsistency without further approval by the
shareholders of the Corporation.
14. CERTAIN TERMINATIONS OF EMPLOYMENT, HARDSHIP AND APPROVED LEAVES OF
ABSENCE. Notwithstanding any other provision of this Plan to the contrary, in
the event of termination of employment by reason of death, disability, normal
retirement, early retirement with the consent of the Corporation, termination of
employment to enter public or military service with the consent of the
Corporation or leave of absence approved by the Corporation, or in the event of
hardship or other special circumstances, of a Participant who holds an Option
Right that is not immediately and fully exercisable, any Restricted Shares as to
which the substantial risk of forfeiture or the prohibition or restriction on
transfer has not lapsed, any Performance Shares or Performance Units that have
not been fully earned, or any Common Shares that are subject to any transfer
restriction pursuant to Section 8(b) of this Plan, the Committee may take any
action that it deems to be equitable under the circumstances or in the best
interests of the Corporation, including without limitation waiving or modifying
any limitation or requirement with respect to any award under this Plan.
A-8
<PAGE> 35
15. ADMINISTRATION OF THE PLAN. (a) This Plan shall be administered by the
Organization and Compensation Committee of the Board, which shall be composed of
not less than three members of the Board, each of whom shall be a "disinterested
person" within the meaning of Rule 16b-3 and an "outside director" within the
meaning of Section 162(m) of the Code. A majority of the Committee shall
constitute a quorum, and the acts of the members of the Committee who are
present at any meeting thereof at which a quorum is present, or acts unanimously
approved by the members of the Committee in writing, shall be the acts of the
Committee.
(b) The interpretation and construction by the Committee of any provision
of this Plan or any agreement, notification or document evidencing the grant of
Option Rights, Restricted Shares, Performance Restricted Shares, Performance
Shares or Performance Units, and any determination by the Committee pursuant to
any provision of this Plan or any such agreement, notification or document,
shall be final and conclusive. No member of the Committee shall be liable for
any such action taken or determination made in good faith.
(c) The Committee may delegate to the appropriate officer or officers of
the Corporation or any Subsidiary, part or all of its authority with respect to
the administration of awards made by the Committee to individuals who are not
officers or directors of the Corporation within the meaning of the Securities
Exchange Act of 1934.
16. AMENDMENTS AND OTHER MATTERS. (a) This Plan may be amended from time to
time by the Board; provided, however, (i) except as expressly authorized by this
Plan, no such amendment shall increase the maximum numbers of Common Shares and
Restricted Shares specified in Section 3(a) hereof, increase the maximum number
of Performance Units specified in Section 3(d) hereof, increase the numbers of
Common Shares specified in Section 3(e) hereof, or otherwise cause this Plan to
cease to satisfy any applicable condition of Rule 16b-3 or otherwise cause any
award under the Plan to cease to qualify for the performance-based exception to
Section 162(m) of the Code, without the further approval of the shareholders of
the Corporation.
(b) The Committee shall not, without the further approval of the
shareholders of the Corporation, authorize the amendment of any outstanding
Option Right to reduce the Option Price. Furthermore, no Option Rights shall be
cancelled and replaced with awards having a lower Option Price without the
further approval of the shareholders of the Corporation.
(c) The Committee may condition the grant of any award or combination of
awards authorized under this Plan on the surrender or deferral by the
Participant of his or her right to receive a cash bonus or other compensation
otherwise payable by the Corporation or a Subsidiary to the Participant.
(d) This Plan shall not confer upon any Participant any right with respect
to continuance of employment or other service with the Corporation or any
Subsidiary and shall not interfere in any way with any right that the
Corporation or any Subsidiary would otherwise have to terminate any
Participant's employment or other service at any time.
(e)(i) To the extent that any provision of this Plan would prevent any
Option Right that was intended to qualify as a Tax-qualified Option from so
qualifying, any such provision shall be null and void with respect to any
such Option Right; provided, however, that any such provision shall remain
in effect with respect to other Option Rights, and there shall be no
further effect on any provision of this Plan.
(ii) Any award that may be made pursuant to an amendment to this Plan
that shall have been adopted without the approval of the stockholders of
the Corporation shall be null and void if it is subsequently determined
that such approval was required in order for this Plan to continue to
satisfy the applicable conditions of Rule 16b-3.
17. TERMINATION OF THE PLAN. No further awards shall be granted under this
Plan after the passage of 10 years from the date on which this Plan is first
approved by the shareholders of the Corporation.
A-9
<PAGE> 36
BRUSH WELLMAN INC.
P
R SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
O
X The undersigned appoints Gordon D. Harnett, or if he is unable
Y or unwilling to act, then Michael C. Hasychak, with full power of
substitution, to vote and act for and in the name of the undersigned as
fully as the undersigned could vote and act if personally present at
the annual meeting of shareholders of Brush Wellman Inc. to be held on
May 2, 1995 and at any adjournment or postponement thereof:
Election of Directors, Nominees: (change of address)
Frank B. Carr, Gerald C. McDonough and ___________________________
John Sherwin, Jr.
___________________________
___________________________
___________________________
(If you have written in the
above space, please mark the
corresponding box on the
reverse side of this card.)
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES, SEE
REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE
WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT VOTE YOUR
SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
SEE REVERSE
SIDE
<PAGE> 37
<TABLE>
<S> <C> <C>
/ X / PLEASE MARK YOUR SHARES IN YOUR NAME REINVESTMENT SHARES
VOTES AS IN THIS
EXAMPLE.
FOR WITHHELD FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
1. Election of / / / / 2. Approving the / / / / / / 3. Confirming the appoint- / / / / / /
Directors adoption of the ment of Ernst & Young
(see reverse) 1995 Stock as independent auditors
Incentive Plan. of the Company.
For, except vote withheld from 4. In accordance with his judgment upon any other
the following nominee(s): matter properly presented.
______________________________
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED
AS DIRECTED OR, IF DIRECTIONS ARE NOT INDICATED,
WILL BE VOTED FOR THE ELECTION OF DIRECTORS AND
FOR ITEM 2 AND 3.
Change / /
of
Address
Attend / /
Meeting
PLEASE SIGN, DATE AND RETURN YOUR PROXY
PROMPTLY IN THE ENCLOSED ENVELOPE WHICH
REQUIRES NO POSTAGE
SIGNATURE(S) _____________________________________________________ DATE ____________
SIGNATURE(S) _____________________________________________________ DATE ____________
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign. When signing as
attorney, executor, administrator, trustee or guardian, please add your title as such.
</TABLE>
<PAGE> 38
CONFIDENTIAL VOTING INSTRUCTIONS
TO: THE NORTHERN TRUST COMPANY, TRUSTEE UNDER THE BRUSH WELLMAN INC. PAYSOP
Pursuant to section 6.8 of the Brush Wellman Inc. Savings and Investment Plan,
the undersigned as a participant in the Plan hereby directs the Trustee to vote
(in person or by proxy) all shares of Common Stock of Brush Wellman Inc.
credited to the undersigned's PAYSOP Contribution Account under the Plan on the
record date for the annual meeting of shareholders of Brush Wellman Inc. to be
held on May 2, 1995 and at any adjournment or postponement thereof, on the
following matters as checked below:
Election of Directors, Nominees:
Frank B. Carr, Gerald C. McDonough and John Sherwin, Jr.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES,
SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT
VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
SEE REVERSE
SIDE
<PAGE> 39
<TABLE>
<S> <C> <C>
/ X / PLEASE MARK YOUR SHARES IN YOUR NAME REINVESTMENT SHARES
VOTES AS IN THIS
EXAMPLE.
FOR WITHHELD FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
1. Election of / / / / 2. Approving the / / / / / / 3. Confirming the appoint- / / / / / /
Directors adoption of the ment of Ernst & Young
(see reverse) 1995 Stock as independent auditors
Incentive Plan. of the Company.
For, except vote withheld from 4. In accordance with his judgment upon any other
the following nominee(s): matter properly presented.
______________________________
PLEASE SIGN EXACTLY AS NAME APPEARS BELOW. THE
TRUSTEE SHALL NOT VOTE SHARES OF THE COMPANY FOR
WHICH IT DOES NOT RECEIVE INSTRUCTIONS.
THIS CONFIDENTIAL VOTING INSTRUCTIONS CARD WILL BE
SEEN ONLY BY AUTHORIZED PERSONNEL OF THE TRUSTEE. THE
SHARES REPRESENTED BY THIS CARD WILL BE VOTED AS
DIRECTED, OR IF DIRECTIONS ARE NOT INDICATED BUT THIS
CARD IS EXECUTED AND RETURNED, WILL BE VOTED FOR THE
ELECTION OF DIRECTORS AND FOR ITEM 2 AND 3.
PLEASE SIGN, DATE AND RETURN YOUR VOTING CARD
PROMPTLY IN THE ENCLOSED ENVELOPE WHICH REQUIRES NO
POSTAGE
SIGNATURE(S) _____________________________________________________ DATE ____________
NOTE: Please sign exactly as name appears hereon. When signing as attorney,
executor, administrator, trustee or guardian, please add your title as such.
</TABLE>
<PAGE> 40
CONFIDENTIAL VOTING INSTRUCTIONS
TO: THE NORTHERN TRUST COMPANY, TRUSTEE UNDER THE BRUSH WELLMAN INC. SAVINGS
AND INVESTMENT PLAN.
Pursuant to section 6.8 of the Brush Wellman Inc. Savings and Investment Plan,
the undersigned as a participant in the Plan hereby directs the Trustee to vote
(in person or by proxy) all shares of Common Stock of Brush Wellman Inc.
credited to the undersigned's account (other than shares credited under the
PAYSOP Contribution Account) under the Plan on the record date for the annual
meeting of shareholders of Brush Wellman Inc. to be held on May 2, 1995 and at
any adjournment or postponement thereof, on the following matters as checked
below:
Election of Directors, Nominees:
Frank B. Carr, Gerald C. McDonough and John Sherwin, Jr.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES,
SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT
VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
SEE REVERSE
SIDE
<PAGE> 41
<TABLE>
<S> <C> <C>
/ X / PLEASE MARK YOUR SHARES IN YOUR NAME REINVESTMENT SHARES
VOTES AS IN THIS
EXAMPLE.
FOR WITHHELD FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
1. Election of / / / / 2. Approving the / / / / / / 3. Confirming the appoint- / / / / / /
Directors adoption of the ment of Ernst & Young
(see reverse) 1995 Stock as independent auditors
Incentive Plan. of the Company.
For, except vote withheld from 4. In accordance with his judgment upon any other
the following nominee(s): matter properly presented.
______________________________
PLEASE SIGN EXACTLY AS NAME APPEARS BELOW. THE
TRUSTEE SHALL VOTE SHARES OF THE COMPANY FOR WHICH IT
DOES NOT RECEIVE INSTRUCTIONS IN THE SAME PROPORTION
AS SUCH SHARES FOR WHICH IT RECEIVES VOTING
INSTRUCTIONS.
THIS CONFIDENTIAL VOTING INSTRUCTIONS CARD WILL BE
SEEN ONLY BY AUTHORIZED PERSONNEL OF THE TRUSTEE. THE
SHARES REPRESENTED BY THIS CARD WILL BE VOTED AS
DIRECTED, OR IF DIRECTIONS ARE NOT INDICATED BUT THIS
CARD IS EXECUTED AND RETURNED, WILL BE VOTED FOR THE
ELECTION OF DIRECTORS AND FOR ITEM 2 AND 3.
PLEASE SIGN, DATE AND RETURN YOUR VOTING CARD
PROMPTLY IN THE ENCLOSED ENVELOPE WHICH REQUIRES NO
POSTAGE
SIGNATURE(S) _____________________________________________________ DATE ____________
NOTE: Please sign exactly as name appears hereon. When signing as attorney,
executor, administrator, trustee or guardian, please add your title as such.
</TABLE>
