<PAGE> 1
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS
AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _______ to ________
Commission file number 1-7006
BRUSH WELLMAN INC.
SAVINGS AND INVESTMENT PLAN
(Full Title of the Plan)
BRUSH WELLMAN INC.
17876 St. Clair Avenue
Cleveland, Ohio 44110
(Name of issuer of the securities held
pursuant to the plan and the address
of its principal executive office.)
<PAGE> 2
BRUSH WELLMAN INC.
SAVINGS AND INVESTMENT PLAN
REQUIRED INFORMATION
- --------------------
Page No.
1. Report of Independent Auditors. 1
2. Statements of Financial Condition -
December 31, 1997 and December 31, 1996 2-3
3. Statements of Income and Changes in Plan
Equity - Plan years ended December 31, 1997,
December 31, 1996 and December 31, 1995. 4-7
4. Notes to Financial Statements. 8-16
5. Schedules required to be filed under ERISA.
a. Schedule of Assets held for Investment
Purposes. 17
b. Schedule of Reportable Transactions. 18
6. Consent of Independent Auditors. 19
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Plan has duly caused this annual report to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio,
on the ____ day of March, 1998.
BRUSH WELLMAN INC.
SAVINGS AND INVESTMENT PLAN
By /s/ Dennis L. Habrat
--------------------------------
Member of the Administrative
Committee
<PAGE> 3
[WESLEY, MILLS & COMPANY LETTERHEAD]
Report of Independent Auditors
------------------------------
Administrative Committee of
Brush Wellman Inc. Savings
and Investment Plan
We have audited the financial statements of Brush Wellman Inc.
Savings and Investment Plan listed in the Annual Report on Form 11-K as of and
for the years ended December 31, 1997 and 1996 and 1995. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements listed in the Annual
Report on Form 11-K present fairly, in all material respects, the financial
position of Brush Wellman Inc. Savings and Investment Plan at December 31, 1997
and 1996, the results of its operations and changes in its plan equity for the
years ended December 31, 1997 and 1996 and 1995 in conformity with generally
accepted accounting principles.
Our audits were made for the purpose of forming an opinion on
the financial statements taken as a whole. The accompanying supplemental
schedules of assets held for investment purposes as of December 31, 1997 and
reportable transactions for the year ended December 31, 1997 are presented for
purposes of complying with the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974, and are not a required part of the financial statements. The supplemental
schedules have been subjected to the auditing procedures applied in our audit of
the financial statements and, in our opinion, are fairly stated in all material
respects in relation to the financial statements taken as a whole.
Wesley, Mills & Company
/s/ Wesley, Mills & Company
March 11, 1998
<PAGE> 4
BRUSH WELLMAN INC.
SAVINGS AND INVESTMENT PLAN
STATEMENT OF FINANCIAL CONDITION
DECEMBER 31, 1997
<TABLE>
<CAPTION>
S&P 500 ASSET FIXED
ASSETS GROWTH INTERNATIONAL INCOME INDEX ALLOCATION INCOME
- ------------------------------------------- ------------ ------------- ------------ ------------ ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Brush Wellman Inc. Common Stock
(cost $22,143,106)
Janus Fund
(cost $12,892,394) $13,986,318
Templeton Foreign Fund
(cost $6,678,891) $6,897,662
PFAMCO Equity Income Fund
(cost $8,273,176) $9,583,620
Northern Trust Collective Stock Index Fund
(cost $10,773,413) $14,505,606
Vanguard Asset Allocation Fund
(cost $7,760,450) $8,873,272
PIMCO Total Return Fund
(cost $6,900,971) $7,202,491
Northern Trust Short-Term Investment Fund
(cost $6,422,214)
Participant Promissory Notes
(cost $3,498,440)
Employee Benefits Money Market Fund
(cost $134,905)
------------ ------------- ------------- ------------ ------------- -------------
13,986,318 6,897,662 9,583,620 14,505,606 8,873,272 7,202,491
Dividends Receivable
Interest Receivable 37,250
Other
------------ ------------- ------------- ------------ ------------- -------------
37,250
------------ ------------- ------------- ------------ ------------- -------------
TOTAL ASSETS $13,986,318 $6,897,662 $9,583,620 $14,505,606 $8,873,272 $7,239,741
============ ============= ============= ============ ============= =============
LIABILITIES & PLAN EQUITY
- -------------------------------------
Plan Equity 13,986,318 6,897,662 9,583,620 14,505,606 8,873,272 7,239,741
------------ ------------- ------------- ------------ -------------- -------------
TOTAL LIABILITIES & PLAN EQUITY $13,986,318 $6,897,662 $9,583,620 $14,505,606 $8,873,272 $7,239,741
============ ============ ============ ============ ============= =============
<CAPTION>
MONEY STOCK PAYSOP LOAN
ASSETS MARKET FUND FUND FUND TOTAL
- ------------------------------------------- ----------- ------------ --------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Brush Wellman Inc. Common Stock
(cost $22,143,106) $27,483,732 $321,612 $27,805,344
Janus Fund
(cost $12,892,394) 13,986,318
Templeton Foreign Fund
(cost $6,678,891) 6,897,662
PFAMCO Equity Income Fund
(cost $8,273,176) 9,583,620
Northern Trust Collective Stock Index Fund
(cost $10,773,413) 14,505,606
Vanguard Asset Allocation Fund
(cost $7,760,450) 8,873,272
PIMCO Total Return Fund
(cost $6,900,971) 7,202,491
Northern Trust Short-Term Investment Fund
(cost $6,422,214) $6,422,214 6,422,214
Participant Promissory Notes
(cost $3,498,440) $3,498,440 3,498,440
Employee Benefits Money Market Fund
(cost $134,905) 133,782 1,123 134,905
------------- -------------- --------- ------------- --------------
6,422,214 27,617,514 322,735 3,498,440 98,909,872
Dividends Receivable 134,127 1,575 135,702
Interest Receivable 30,647 751 5 68,653
Other
------------- -------------- --------- ------------- --------------
30,647 134,878 1,580 204,355
------------- -------------- --------- ------------- --------------
TOTAL ASSETS $6,452,861 $27,752,392 $324,315 $3,498,440 $99,114,227
============= ============== ========= ============= ==============
LIABILITIES & PLAN EQUITY
- -------------------------------------
Plan Equity 6,452,861 27,752,392 324,315 3,498,440 99,114,227
------------- -------------- --------- ------------ -------------
TOTAL LIABILITIES & PLAN EQUITY $6,452,861 $27,752,392 $324,315 $3,498,440 $99,114,227
============ ============== ======== ============ =============
</TABLE>
See accompanying notes to financial statements.
2
<PAGE> 5
BRUSH WELLMAN INC.
SAVINGS AND INVESTMENT PLAN
STATEMENT OF FINANCIAL CONDITION
DECEMBER 31, 1996
<TABLE>
<CAPTION>
S&P 500 ASSET FIXED
ASSETS GROWTH INTERNATIONAL INCOME INDEX ALLOCATION INCOME
- ------------------------------------------- ------------- ------------- ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Brush Wellman Inc. Common Stock
(cost $21,316,961)
Janus Fund
(cost $9,140,759) $10,368,651
Templeton Foreign Fund
(cost $5,334,105) $6,029,302
PFAMCO Equity Income Fund
(cost $5,793,594) $6,407,987
Northern Trust Collective Stock Index Fund
(cost $7,548,719) $9,625,596
Vanguard Asset Allocation Fund
(cost $6,851,379) $6,890,813
PIMCO Total Return Fund
(cost $6,304,014) $6,631,102
Northern Trust Short-Term Investment Fund
(cost $6,805,573)
Participant Promissory Notes
(cost $3,256,882)
Employee Benefits Money Market Fund
(cost $102,828)
------------- ------------- ----------- ----------- ------------ -----------
10,368,651 6,029,302 6,407,987 9,625,596 6,890,813 6,631,102
Dividends Receivable 35,758
Interest Receivable
Other 106,649
------------- ------------- ----------- ----------- ------------ -----------
106,649 35,758
------------- ------------- ----------- ----------- ------------ -----------
TOTAL ASSETS $10,368,651 $6,029,302 $6,514,636 $9,625,596 $6,890,813 $6,666,860
============= ============= =========== =========== ============ ===========
LIABILITIES & PLAN EQUITY
- ---------------------------------------
Plan Equity 10,368,651 6,029,302 6,514,636 9,625,596 6,890,813 6,666,860
------------- ------------- ----------- ----------- ------------ -----------
TOTAL LIABILITIES & PLAN EQUITY $10,368,651 $6,029,302 $6,514,636 $9,625,596 $6,890,813 $6,666,860
============= ============= =========== =========== ============ ===========
<CAPTION>
MONEY STOCK PAYSOP LOAN
ASSETS MARKET FUND FUND FUND TOTAL
- ------------------------------------------- -------------- ---------------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
Brush Wellman Inc. Common Stock
(cost $21,316,961) $17,763,305 $222,406 $17,985,711
Janus Fund
(cost $9,140,759) 10,368,651
Templeton Foreign Fund
(cost $5,334,105) 6,029,302
PFAMCO Equity Income Fund
(cost $5,793,594) 6,407,987
Northern Trust Collective Stock Index Fund
(cost $7,548,719) 9,625,596
Vanguard Asset Allocation Fund
(cost $6,851,379) 6,890,813
PIMCO Total Return Fund
(cost $6,304,014) 6,631,102
Northern Trust Short-Term Investment Fund
(cost $6,805,573) $6,757,471 6,757,471
Participant Promissory Notes
(cost $3,256,882) $3,256,882 3,256,882
Employee Benefits Money Market Fund
(cost $102,828) 88,991 13,837 102,828
-------------- ---------------- ------------ ------------- -------------
6,757,471 17,852,296 236,243 3,256,882 74,056,343
Dividends Receivable 119,317 1,496 156,571
Interest Receivable 30,302 500 65 30,867
Other 106,649
-------------- ---------------- ------------ ------------- -------------
30,302 119,817 1,561 294,087
-------------- ---------------- ------------ ------------- -------------
TOTAL ASSETS $6,787,773 $17,972,113 $237,804 $3,256,882 $74,350,430
============== ================ ============ ============= =============
LIABILITIES & PLAN EQUITY
- ---------------------------------------
Plan Equity 6,787,773 17,972,113 237,804 3,256,882 74,350,430
-------------- ---------------- ------------ ------------- -------------
TOTAL LIABILITIES & PLAN EQUITY $6,787,773 $17,972,113 $237,804 $3,256,882 $74,350,430
============== ================ ============ ============= =============
</TABLE>
See accompanying notes to financial statements.
3
<PAGE> 6
BRUSH WELLMAN INC.
SAVINGS AND INVESTMENT PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
S&P 500 ASSET FIXED
GROWTH INTERNATIONAL INCOME INDEX ALLOCATION INCOME
------------- ----------------- ------------- ------------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividends $589,960 $322,339 $244,109 $196,820 $285,646
Interest 506 293 342 542 319 $426,821
Other Income (Expense)
------------- ----------------- ------------- ------------- --------------- -----------
590,466 322,632 244,451 197,362 285,965 426,821
Realized Gain (Loss) on
Investments--Note E 2,015,682 580,554 1,269,377 1,504,561 545,573 266,798
Unrealized Appreciation (Depreciation)
on Investments--Note F (133,969) (476,424) 696,051 1,655,317 1,073,388 (25,567)
Contributions--Note B
Company
401(k) 1,495,850 881,985 768,668 1,073,326 702,802 569,428
------------- ----------------- ------------- ------------- --------------- -----------
1,495,850 881,985 768,668 1,073,326 702,802 569,428
Investment Election Change (100,358) (104,166) 509,790 898,543 140,557 (347,350)
Loan Transfers 32,148 62,807 6,952 (93,106) 743 (32,498)
Unallocated Loan Payments
Withdrawals and
Terminations--Note C 282,152 399,028 426,305 355,993 766,569 284,751
------------- ----------------- ------------- ------------- --------------- -----------
Income and Changes in Plan Equity 3,617,667 868,360 3,068,984 4,880,010 1,982,459 572,881
Plan Equity at Beginning of the Year 10,368,651 6,029,302 6,514,636 9,625,596 6,890,813 6,666,860
------------- ----------------- ------------- ------------- --------------- -----------
PLAN EQUITY AT END OF THE YEAR $13,986,318 $6,897,662 $9,583,620 $14,505,606 $8,873,272 $7,239,741
============= ================= ============= ============= =============== ===========
<CAPTION>
MONEY STOCK PAYSOP LOAN
MARKET FUND FUND FUND TOTAL
--------------- -------------- ------------ ------------- --------------
<S> <C> <C> <C> <C> <C>
Investment Income:
Dividends $512,954 $6,170 $2,157,998
Interest $376,814 16,269 397 $253,118 1,075,421
Other Income (Expense) 23,624 (1,557) 22,067
--------------- -------------- ------------ ------------- --------------
376,814 552,847 5,010 253,118 3,255,486
Realized Gain (Loss) on
Investments--Note E 129,878 (52,977) 6,259,446
Unrealized Appreciation (Depreciation)
on Investments--Note F 8,830,479 163,010 11,782,285
Contributions--Note B
Company 2,113,241 2,113,241
401(k) 384,661 440,310 6,317,030
--------------- -------------- ------------ ------------- --------------
384,661 2,553,551 8,430,271
Investment Election Change 151,572 (1,134,258) (14,330)
Loan Transfers (41,032) (37,296) 67,743 (33,539)
Unallocated Loan Payments 33,539 33,539
Withdrawals and
Terminations--Note C 1,206,927 1,114,922 14,202 112,842 4,963,691
--------------- -------------- ------------ ------------- --------------
Income and Changes in Plan Equity (334,912) 9,780,279 86,511 241,558 24,763,797
Plan Equity at Beginning of the Year 6,787,773 17,972,113 237,804 3,256,882 74,350,430
--------------- -------------- ------------ ------------- --------------
PLAN EQUITY AT END OF THE YEAR $6,452,861 $27,752,392 $324,315 $3,498,440 $99,114,227
=============== ============== ============ ============= ==============
</TABLE>
See accompanying notes to financial statements.
4
<PAGE> 7
BRUSH WELLMAN INC.
SAVINGS AND INVESTMENT PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
S&P 500 ASSET ASSET
GROWTH INTERNATIONAL INCOME INDEX ALLOCATION ALLOCATION
-------------- -------------- ------------ ----------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividends $78,618 $155,189 $178,089 $196,318 $59,791 $184,120
Interest 40
Other Income (Expense) (140,542) (49,661) (52,745) 1,051 753
-------------- -------------- ------------ ----------- ------------- -------------
(61,924) 105,528 125,344 197,409 59,791 184,873
Realized Gain (Loss) on
Investments--Note E 1,400,469 223,270 1,108,472 722,676 501,151 376,090
Unrealized Appreciation (Depreciation)
on Investments--Note F 224,826 567,238 (75,051) 791,262 (312,645) 39,434
Contributions--Note B
Company
401(k) 1,235,328 768,459 633,965 771,948 338,277 282,974
-------------- -------------- ------------ ----------- ------------- -------------
1,235,328 768,459 633,965 771,948 338,277 282,974
Investment Election Change:
7/1/96 Plan Change (5,927,322) 5,927,322
Current Year Changes 693,444 (279,414) 298,540 531,373 (272,484) 168,495
Loan Transfers 5,708 4,535 (34,396) 5,128 12,176 (13,856)
Unallocated Loan Payments
Withdrawals and
Terminations--Note C 396,728 134,326 322,488 448,605 209,694 74,519
-------------- -------------- ------------ ----------- ------------- -------------
Income and Changes in Plan Equity 3,101,123 1,255,290 1,734,386 2,571,191 (5,810,750) 6,890,813
Plan Equity at Beginning of the Year 7,267,528 4,774,012 4,780,250 7,054,405 5,810,750 0
-------------- -------------- ------------ ----------- ------------- -------------
PLAN EQUITY AT END OF THE YEAR $10,368,651 $6,029,302 $6,514,636 $9,625,596 $0 $6,890,813
============== ============== ============ =========== ============= =============
<CAPTION>
FIXED MONEY STOCK PAYSOP LOAN
INCOME MARKET FUND FUND FUND TOTAL
------------ ------------ -------------- ----------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividends $442,822 $7,080 $1,302,027
Interest $429,974 $346,350 6,117 1,118 $251,904 1,035,503
Other Income (Expense) 1,374 (1,469) (241,239)
------------ ------------ -------------- ----------- ------------ --------------
429,974 346,350 450,313 6,729 251,904 2,096,291
Realized Gain (Loss) on
Investments--Note E 53,664 (45,347) 4,340,445
Unrealized Appreciation (Depreciation)
on Investments--Note F (199,966) (998,240) (11,142) 25,716
Contributions--Note B
Company 1,910,402 1,910,402
401(k) 619,396 423,544 401,965 5,475,856
------------ ------------ -------------- ----------- ------------ --------------
619,396 423,544 2,312,367 7,386,258
Investment Election Change:
7/1/96 Plan Change
Current Year Changes (544,791) (57,542) (531,725) (5,896)
Loan Transfers 16,034 (93,033) (107,586) 82,865 (122,425)
Unallocated Loan Payments (87,732) (87,732)
Withdrawals and
Terminations--Note C 279,031 427,521 774,612 11,168 92,213 3,170,905
------------ ------------ -------------- ----------- ------------ --------------
Income and Changes in Plan Equity 95,280 191,798 305,170 (21,477) 154,824 10,467,648
Plan Equity at Beginning of the Year 6,571,580 6,595,975 17,666,943 259,281 3,102,058 63,882,782
------------ ------------ -------------- ----------- ------------ --------------
PLAN EQUITY AT END OF THE YEAR $6,666,860 $6,787,773 $17,972,113 $237,804 $3,256,882 $74,350,430
============ ============ ============== =========== ============ ==============
</TABLE>
See accompanying notes to financial statements.
5
<PAGE> 8
BRUSH WELLMAN INC.
SAVINGS AND INVESTMENT PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
S&P 500 ASSET FIXED MONEY
GROWTH INTERNATIONAL INCOME INDEX ALLOCATION INCOME MARKET
---------- ------------- ----------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividends $ 230,704 $ 120,175 $ 118,087 $ 126,716 $ 175,358 $ 37,345 $ 335
Interest 3 62 (57) 1,406 (88) 369,523 384,180
Other Income (Expense) 145,446 52,799 160,893 215 (5,789) 130 411
---------- ---------- ---------- ---------- ---------- ---------- ----------
376,153 173,036 278,923 128,337 169,481 406,998 384,926
Realized Gain (Loss) on
Investments--Note E 110,541 177,639 84,078 332,016 417,723 143,684
Unrealized Appreciation (Depreciation)
on Investments--Note F 1,003,066 127,958 689,444 1,285,614 312,645 527,054
Contributions--Note B
Company
401(k) 1,095,412 827,949 572,343 597,024 679,023 698,659 514,984
---------- ---------- ---------- ---------- ---------- ---------- ----------
1,095,412 827,949 572,343 597,024 679,023 698,659 514,984
Plan Merger -- Note A 501
Investment Election Change:
1/1/95 Plan Change 4,298,945 3,712,726 2,976,847 4,587,494 5,167,817 5,192,931 6,663,511
Current Year Changes 541,260 (75,928) 308,292 367,108 (718,922) (47,775) (93,355)
Loan Transfers (22,439) 3,922 (9,258) (20,141) (19,177) (119,899) (83,478)
Unallocated Loan Payments
Withdrawals and
Terminations--Note C 135,410 173,290 120,419 223,047 197,840 230,072 791,114
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income and Changes in Plan Equity 7,267,528 4,774,012 4,780,250 7,054,405 5,810,750 6,571,580 6,595,975
Plan Equity at Beginning of the Year 0 0 0 0 0 0 0
---------- ---------- ---------- ---------- ---------- ---------- ----------
PLAN EQUITY AT END OF THE YEAR $7,267,528 $4,774,012 $4,780,250 $7,054,405 $5,810,750 $6,571,580 $6,595,975
========== ========== ========== ========== ========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
6
<PAGE> 9
BRUSH WELLMAN INC.
SAVINGS AND INVESTMENT PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
INCOME EQUITY EQUITY EQUITY STOCK PAYSOP
FUND FUND A FUND B FUND C FUND FUND
------------- ----------- ----------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividends $352,679 $3,568
Interest 10,744 1,291
Other Income (Expense) 192,317 3,647
------------- ----------- ----------- ----------- ------------- -----------
555,740 8,506
Realized Gain (Loss) on
Investments--Note E 214,089 474,999 (12,619) 5,888 (82,030)
Unrealized Appreciation (Depreciation)
on Investments--Note F (201,462) (472,705) 14,214 (2,813) (157,861) 1,385
Contributions--Note B
Company 1,815,838
401(k) 442,057
------------- ----------- ----------- ----------- ------------- -----------
2,257,895
Plan Merger -- Note A 2,174,657 221,971 266,585 363,013 687,127
Investment Election Change:
1/1/95 Plan Change (17,434,297) (6,400,676) (2,818,083) (5,693,929) (275,286)
Current Year Changes (255,586) (2,722)
Loan Transfers (121,062)
Unallocated Loan Payments
Withdrawals and
Terminations--Note C 721,484 11,547
------------- ----------- ----------- ----------- ------------- -----------
Income and Changes in Plan Equity (15,247,013) (6,176,411) (2,549,903) (5,327,841) 1,887,453 (4,378)
Plan Equity at Beginning of the Year 15,247,013 6,176,411 2,549,903 5,327,841 15,779,490 263,659
------------- ----------- ----------- ----------- ------------- -----------
PLAN EQUITY AT END OF THE YEAR $0 $0 $0 $0 $17,666,943 $259,281
============= =========== =========== =========== ============= ===========
<CAPTION>
LOAN
FUND TOTAL
----------- ------------
<S> <C> <C>
Investment Income:
Dividends $1,164,967
Interest $182,910 949,974
Other Income (Expense) 550,069
----------- ------------
182,910 2,665,010
Realized Gain (Loss) on
Investments--Note E 1,866,008
Unrealized Appreciation (Depreciation)
on Investments--Note F 3,126,539
Contributions--Note B
Company 1,815,838
401(k) 5,427,451
----------- ------------
7,243,289
Plan Merger -- Note A 133,074 3,846,928
Investment Election Change:
1/1/95 Plan Change 22,000
Current Year Changes 22,372
Loan Transfers 391,532
Unallocated Loan Payments 154,810 154,810
Withdrawals and
Terminations--Note C 154,064 2,758,287
----------- ------------
Income and Changes in Plan Equity 730,262 16,166,669
Plan Equity at Beginning of the Year 2,371,796 47,716,113
----------- ------------
PLAN EQUITY AT END OF THE YEAR $3,102,058 $63,882,782
=========== ============
</TABLE>
See accompanying notes to financial statements.
7
<PAGE> 10
NOTES TO FINANCIAL STATEMENTS
BRUSH WELLMAN INC.
SAVINGS AND INVESTMENT PLAN
DECEMBER 31, 1997, DECEMBER 31, 1996 AND DECEMBER 31, 1995
NOTE A - The accounting records of the Brush Wellman Inc. Savings and Investment
Plan (Plan) are maintained on the accrual basis. Investments are stated at
current market value. Investment in securities traded on national securities
exchanges are valued at the latest reported closing price. Investment in
participant units of the Northern Trust Short-Term Investment Fund, Managed
Guaranteed Investment Contract Fund and the Employee Benefits Money Market Fund
are stated at market value as determined by the Trustee. Cost is determined by
the average cost method.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Effective January 1, 1995 the Williams Advanced Materials Inc. Savings
and Investment Plan was merged into the Plan. Prior to the merger, the plans
separately covered eligible employees at Brush Wellman Inc. and its subsidiary
Williams Advanced Materials Inc. There were no substantial changes in
eligibility, Company contributions, plan benefits or value of plan assets as a
result of the merger. The transferred net assets were recognized in the accounts
of the Plan, at the balances as previously carried in the accounts of the
Williams Advanced Materials Inc. Savings and Investment Plan. The changes in net
assets of the combined plans are included in the accompanying Statement of
Income and Changes in Plan Equity from January 1, 1995.
NOTE B - The Plan is a defined contribution plan which covers certain eligible
employees with one year of eligibility service with Brush Wellman Inc.
(Company). An employee shall be credited with a year of eligibility service if
he is credited with at least 1,000 hours of service in any twelve consecutive
month period beginning with date of hire or rehire of the employee (or an
anniversary of the latest such date).
The Plan provides for basic contributions on behalf of employees up to
6% of their earnings through either salary reduction or employee after-tax
contributions. Basic contributions were matched by the Company at the rate of
50% of such contributions. The rate at which such basic contributions are
matched by the Company may be decreased or increased (up to 100%) by action of
the Company's Board of Directors.
An employee who makes basic contributions of 6% of earnings may also
make supplemental contributions of up to 9% of earnings which are not matched by
Company contributions and which may be made in any combination of salary
reduction and/or after-tax contributions.
An employee's contributions made to the Plan on a salary reduction basis
may not exceed certain maximum amounts. The maximum amounts were $9,500 in 1997,
$9,500 in 1996 and $9,240 in 1995. All employee and Company matching
contributions are fully vested at all times.
8
<PAGE> 11
Participants may direct that their basic, supplemental and transfer
contributions (as described in the Plan) be invested in one or more of the
following: Growth Fund, International Fund, Income Fund, S&P 500 Index Fund,
Asset Allocation Fund, Fixed Income Fund, Money Market Fund and the Company
Stock Fund in increments of 1%. Prior to March 3, 1995, participant contribution
directions were allowed at 10% increments. All Company matching contributions
are invested in the Company Stock Fund except with respect to Participants age
55 or older who may transfer such contributions to other investment funds. Prior
to March 3, 1995 the minimum age for the exception was 59 1/2.
The Growth Fund invests primarily in the Janus Fund. The objective of
the fund is to produce capital appreciation; dividend income is a secondary
source of return. The fund invests primarily in the stocks of companies and
industries that are experiencing increasing demand for their products and
services. There were 1,253 participants in the fund at the end of the Plan year.
The International Fund invests primarily in the Templeton Foreign Fund.
The objective of the fund is to produce capital appreciation. The fund primarily
invests in stocks of companies located outside of the United States. There were
903 participants in the fund at the end of the Plan year.
The Income Fund invests primarily in the PFAMCO Equity Income Fund. The
objective of the fund is to seek current income from stocks in each industry
that have low prices relative to their earnings and high dividend yields. The
fund will usually be fully invested in stocks. There were 884 participants in
the fund at the end of the Plan year.
The S&P 500 Index Fund invests primarily in the Northern Trust
Collective Stock Index Fund. The objective of the fund is to produce returns
that match the returns of the Standard & Poor's 500 Stock Index. The fund
proportionately invests in each of the stocks that comprise the Standard &
Poor's 500 Stock Index. There were 1,068 participants in the fund at the end of
the Plan year.
The Asset Allocation Fund invests primarily in the Vanguard Asset
Allocation Fund. The objective of the fund is to maximize total returns
consistent with reasonable risk using a combination of stocks, bonds, and money
market investments. Prior to July 1, 1996, the Asset Allocation Fund invested
primarily in the Phoenix Total Return Fund. There were 847 participants in the
fund at the end of the Plan year.
The Fixed Income Fund invests primarily in the PIMCO Total Return Fund.
The objective of the fund is to seek current income and capital appreciation.
The fund invests in bonds with an average maturity of three to six years and
will generally be invested in high quality securities including U.S. Government
bonds, corporate bonds, mortgage-related securities and money market
investments. There were 626 participants in the fund at the end of the Plan
year.
The Money Market Fund invests primarily in the Northern Trust Short-Term
Investment Fund. The objective of the fund is to maximize current income on cash
reserves to the extent consistent with principal preservation and maintenance of
liquidity. The fund invests in high-grade money market instruments with short
maturities. There were 496 participants in the fund at the end of the Plan year.
The Company Stock Fund invests primarily in Brush Wellman Inc. Common
Stock. There were 1,796 participants in the fund at the end of the Plan year.
On July 1, 1996 the Plan changed the investment choice for the Asset
Allocation Fund from the Phoenix Total Return Fund to the Vanguard Asset
Allocation Fund. All assets from the Phoenix Fund were transferred into the
Vanguard Fund effective this date.
9
<PAGE> 12
Prior to January 1, 1995 participants could direct their basic,
supplemental and transfer contributions (as described in the Plan) be invested
in one or more of the following; Income Fund, Equity Fund A, Equity Fund B,
Equity Fund C and the Company Stock Fund in increments of 10%.
The Income Fund invests primarily in the Managed Guaranteed Investment
Contract Fund, the objective of which is to achieve high current income with
stability of principal. The fund is primarily invested in Guaranteed Investment
Contracts.
Equity Fund A invests primarily in the Fidelity U.S. Equity Index Fund.
This fund is a growth and income fund. It seeks a yield that corresponds with
the total return of the Standard & Poor's 500 Stock Index. The fund's share
price will fluctuate and dividend amounts will vary.
Equity Fund B invests primarily in the Fidelity Fund. This fund seeks
long-term capital growth and current return on capital and will select some
securities for their income characteristics, which may limit the potential for
growth. The fund's share price and dividend income will fluctuate as the value
and yields of the securities in its investment portfolio fluctuate.
Equity Fund C invests primarily in Fidelity Puritan Fund. This fund is a
growth and income fund. It seeks capital growth in addition to regular quarterly
dividends. It invests in a broadly diversified portfolio of common stocks,
preferred stocks and bonds, including lower-quality, high yield debt securities.
The fund's share price will fluctuate and dividend amounts will vary.
The Plan, as originally adopted, included a Payroll Stock Ownership Plan
(PAYSOP) feature that applied through 1986. Under the PAYSOP, the Company made
contributions based upon a percentage of payroll and was afforded an additional
credit against federal income tax up to the amount allowable by the Internal
Revenue Code. The PAYSOP contribution by the Company, which could be in Common
Stock of the Company or cash used to purchase Common Stock of the Company, was a
percentage of the compensation paid to all employees who made salary reduction
contributions to the Plan at any time during the year and who were members of
the Plan as of the last pay period of such year. The shares of Common Stock of
the Company contributed or purchased were allocated equally to all eligible
participants.
A participant may borrow funds from his account, excluding his interest
in the PAYSOP Fund, provided such loan is secured by the participant's interest
in his account and evidenced by a promissory note executed by the participant.
The promissory notes are held in trust as a separate fund, Loan Fund, of the
Plan.
Prior to June 1, 1989, participants who were employees of Williams
Advanced Materials Inc. could have directed a portion of their contributions to
be used to purchase insurance policies that were excluded from the former
Williams Advanced Materials Inc. Savings and Investment Plan assets. Life
insurance policies on the lives of participants, purchased under the former
Williams Advanced Materials Inc. Savings and Investment Plan prior to July 1,
1989, may continue to be held.
All costs and expenses incurred in connection with the administration of
the Plan for 1997, 1996, and 1995 were paid by the Company.
Information concerning the Plan agreement and the vesting and benefit
provisions is contained in the Summary Plan Description. Copies of this pamphlet
are available from the Plan administrator.
10
<PAGE> 13
NOTE C - At retirement, death or other termination, a participant (or his death
beneficiary) is eligible to receive a distribution of all employee, Company
matching and PAYSOP contributions credited to the employee's account plus or
minus any net gain or loss thereon.
The value of distributions and withdrawals is based on the value of a
participant's account on the valuation date immediately preceding the date of
distribution or withdrawal and is deducted from the participant's account as of
such valuation date.
Distribution to a participant or a person designated by the participant
as his death beneficiary is made under one of the following methods as elected
by the participant:
( i) Lump sum payment in cash; or
(ii) Lump sum payment in cash, except that a participant's interest in
the Company Stock Fund and the PAYSOP Fund will be paid in full shares of Common
Stock of the Company, with any fractional shares being paid in cash.
11
<PAGE> 14
NOTE D - Shares of face value by investment as of December 31, 1997 and December
31, 1996 are as follows:
<TABLE>
<CAPTION>
Shares By Investment
--------------------------------
Investment 1997 1996
---------- ---- ----
<S> <C> <C>
Janus Fund 561,700 424,076
Templeton Fund 693,232 581,979
PFAMCO Equity Income Fund 629,259 472,565
Northern Trust Collective Stock
Index Fund 767,899 617,421
Vanguard Asset Allocation Fund 421,533 384,103
PIMCO Total Return Fund 679,480 631,534
Northern Trust Short-Term
Investment Fund 6,422,213 6,757,471
Brush Wellman Inc. Common Stock 1,134,912 1,213,246
Employee Benefit Money Market Fund 134,905 68,776
</TABLE>
In addition, $3,498,440 and $3,256,882 were invested in Participant Promissory
Notes as of December 31, 1997 and December 31, 1996, respectively.
On July 1, 1996 the Vanguard Asset Allocation Fund replaced the Phoenix Total
Return Fund.
12
<PAGE> 15
NOTE E: The net realized gain (loss) on sales of investments for the Plan years
ended December 31, 1997 December 31, 1996 and December 31, 1995 is as follows:
<TABLE>
<CAPTION>
1997
----------------------------------------------------------------------
Investment Shares Cost Proceeds Gain(Loss)
---------- ------ ---- -------- ----------
<S> <C> <C> <C> <C>
Janus Fund 48,746 $1,735,953 $3,751,635 $2,015,682
Templeton Fund 92,636 764,231 1,344,785 580,554
PFAMCO Equity Income Fund 41,321 1,210,205 2,479,582 1,269,377
Northern Trust Collective Stock
Index Fund 87,600 1,720,132 3,224,693 1,504,561
Vanguard Asset Allocation Fund 72,313 363,499 909,072 545,573
PIMCO Total Return Fund 169,306 330,159 596,957 266,798
Brush Wellman Inc. Common Stock 61,873 1,003,412 1,080,313 76,901
--------------
$6,259,446
==============
</TABLE>
<TABLE>
<CAPTION>
1996
----------------------------------------------------------------------
Investment Shares Cost Proceeds Gain(Loss)
---------- ------ ---- -------- ----------
<S> <C> <C> <C> <C>
Janus Fund 32,450 $665,430 $2,065,899 $1,400,469
Templeton Fund 97,393 879,703 1,102,973 223,270
PFAMCO Equity Income Fund 54,403 640,837 1,749,309 1,108,472
Northern Trust Collective Stock
Index Fund 75,307 872,895 1,595,571 722,676
Phoenix Total Return Fund 396,623 6,033,647 6,534,798 501,151
Vanguard Asset Allocation Fund 8,232 146,556 522,646 376,090
PIMCO Total Return Fund 142,677 1,416,931 1,470,595 53,664
Brush Wellman Inc. Common Stock 48,137 928,849 883,502 (45,347)
--------------
$4,340,445
==============
</TABLE>
<TABLE>
<CAPTION>
1995
----------------------------------------------------------------------
Investment Shares Cost Proceeds Gain(Loss)
---------- ------ ---- -------- ----------
<S> <C> <C> <C> <C>
Janus Fund 33,940 $650,645 $761,186 $110,541
Templeton Fund 103,753 917,868 1,095,507 177,639
PFAMCO Equity Income Fund 53,330 589,799 673,877 84,078
Northern Trust Collective Stock
Index Fund 87,493 932,548 1,264,564 332,016
Phoenix Total Return Fund 82,342 1,225,019 1,642,742 417,723
PIMCO Total Return Fund 117,292 1,144,388 1,288,072 143,684
Brush Wellman Inc. Common Stock 59,224 1,150,567 1,068,537 (82,030)
Managed Guaranteed Investment
Contract Fund 1,729,438 17,296,476 17,510,565 214,089
Fidelity U.S. Equity Index Portfolio 378,019 5,919,589 6,394,588 474,999
Fidelity Fund Inc. 153,786 2,856,184 2,843,565 (12,619)
Fidelity Puritan Fund 379,472 5,617,162 5,623,050 5,888
--------------
$1,866,008
==============
</TABLE>
The Department of Labor requires that realized gains and losses be calculated
using current cost (cost at the beginning of the Plan Year) rather than
historical cost. Realized gains under the current cost method for the year ended
December 31, 1997 are as follows:
<TABLE>
<CAPTION>
Realized
Gain/(Loss)
------------------
<S> <C>
Brush Wellman Inc. Common Stock $125,135
Janus Fund 2,042,395
Templeton Fund 609,425
PFAMCO Equity Income Fund 1,283,234
Northern Trust Collective Stock Index Fund 1,564,425
Vanguard Asset Allocation Fund 555,302
PIMCO Total Return Fund 250,693
------------------
$6,430,609
==================
</TABLE>
13
<PAGE> 16
NOTE F - The unrealized appreciation (depreciation) of investments for the Plan
years ended December 31, 1997, December 31, 1996 and December 31, 1995 is as
follows:
<TABLE>
<CAPTION>
Balance Balance
January 1 December 31
1997 Change 1997
-------------- ---------------- ----------------
<S> <C> <C> <C>
Janus Fund $1,227,892 ($133,969) $1,093,923
Templeton Fund 695,196 (476,424) 218,772
PFAMCO Equity Income Fund 614,393 696,051 1,310,444
Northern Trust Collective Stock Index Fund 2,076,876 1,655,317 3,732,193
Vanguard Asset Allocation Fund 39,434 1,073,388 1,112,822
PIMCO Total Return Fund 327,088 (25,567) 301,521
Brush Wellman Inc. Common Stock (3,331,250) 8,993,489 5,662,239
----------------
$11,782,285
================
</TABLE>
<TABLE>
<CAPTION>
Balance Balance
January 1 December 31
1996 Change 1996
-------------- ---------------- ----------------
<S> <C> <C> <C>
Janus Fund $1,003,066 $224,826 $1,227,892
Templeton Fund 127,958 567,238 695,196
PFAMCO Equity Income Fund 689,444 (75,051) 614,393
Northern Trust Collective Stock Index Fund 1,285,614 791,262 2,076,876
Phoenix Total Return Fund 312,645 (312,645) 0
Vanguard Asset Allocation Fund 0 39,434 39,434
PIMCO Total Return Fund 527,054 (199,966) 327,088
Brush Wellman Inc. Common Stock (2,321,868) (1,009,382) (3,331,250)
----------------
$25,716
================
</TABLE>
14
<PAGE> 17
<TABLE>
<CAPTION>
Balance Balance
January 1 December 31
1995 Change 1995
---------------- ---------------- -----------------
<S> <C> <C> <C>
Janus Fund $1,003,066 $1,003,066
Templeton Fund 127,958 127,958
PFAMCO Equity Income Fund 689,444 689,444
Northern Trust Collective Stock
Index Fund 1,285,614 1,285,614
Phoenix Total Return Fund 312,645 312,645
PIMCO Total Return Fund 527,054 527,054
Northern Trust Short-Term
Investment Fund
Brush Wellman Inc. Common Stock:
-Brush Wellman Savings & Investment Plan ($2,219,813) (102,055) (2,321,868)
-Williams Advanced Materials Savings &
Investment Plan 54,421 (54,421)
Managed Guaranteed Investment Contract Fund:
-Brush Wellman Savings & Investment Plan 176,253 (176,253)
-Williams Advanced Materials Savings &
Investment Plan 25,209 (25,209)
Fidelity U.S. Equity Index Portfolio:
-Brush Wellman Savings & Investment Plan 461,819 (461,819)
-Williams Advanced Materials Savings &
Investment Plan 10,886 (10,886)
Fidelity Fund Inc.:
-Brush Wellman Savings & Investment Plan (6,359) 6,359
-Williams Advanced Materials Savings &
Investment Plan (7,855) 7,855
Fidelity Puritan Fund:
-Brush Wellman Savings & Investment Plan 17,658 (17,658)
-Williams Advanced Materials Savings &
Investment Plan (14,845) 14,845
----------------
$3,126,539
================
</TABLE>
The Department of Labor requires that unrealized appreciation and depreciation
be calculated using current cost rather that historical cost. Unrealized gains
and losses under the current cost method for the year ended December 31, 1997
are as follows:
<TABLE>
<CAPTION>
Change in
Unrealized Gain/(Loss)
---------------------------
<S> <C>
Janus Fund ($160,682)
Templeton Fund (505,295)
PFAMCO Equity Income Fund 682,194
Northern Trust Collective Stock Index Fund 1,595,453
Vanguard Asset Allocation Fund 1,063,659
PIMCO Total Return Fund (9,462)
Brush Wellman Inc. Common Stock 8,945,255
----------------
$11,611,122
================
</TABLE>
15
<PAGE> 18
NOTE G - The Internal Revenue Service has determined that the Plan is qualified
under Internal Revenue Code Section 401(a) and that the related trust is,
therefore, tax-exempt under Code Section 501(a).
Continued qualification of the Plan depends upon timely adoption and
operational application of certain amendments required as a result of the Tax
Reform Act of 1986 (Act). In the Company's opinion, the Plan is operating in
compliance with the applicable provisions of the Act.
The Company is allowed a federal income tax deduction for its employer
matching contributions to the Plan.
The Plan provides, among other things, for contributions to be made to
the Plan pursuant to a qualified cash or deferred arrangement (CODA) under
Section 401(k) of the IRC. CODA contributions made to the Trust for a
participant will reduce a participant's current compensation and will not be
included in the gross income of the participant for federal income tax purposes
in the year made. Such amounts will, however, be considered as part of the
participant's gross income for purposes of Social Security taxes.
Non-CODA contributions withheld under the Plan from a participant
through payroll deductions will be included in the gross income of the
participant in the year withheld and are not deductible by the participant for
federal income tax purposes.
A participant does not become subject to federal income taxes as a
result of their participation in the Plan until the assets in their account are
withdrawn by, or distributed to, the participant.
NOTE H - The Plan was restated on January 1, 1995. Subsequent amendments Nos. 1
and 2, also effective January 1, 1995, provide for certain provisions concerning
member contributions, distributions and key employee testing procedures.
NOTE I - Effective January 1, 1995 the Williams Advanced Materials Inc. Savings
and Investment Plan was merged into the Plan. Prior to the merger, the plans
covered eligible employees at Brush Wellman Inc. and its subsidiary, Williams
Advanced Materials Inc., there were no substantial changes in eligibility,
Company contributions, plan benefits or value of plan assets as a result of the
merger. The transferred net assets have been recognized in the accounts of the
Plan, at their balances as previously carried in the accounts of the Williams
Advanced Materials Inc. Savings and Investment Plan. The changes in net assets
of the combined plans are included in the accompanying Statement of Changes in
Net Assets available for benefits from January 1, 1995.
16
<PAGE> 19
EIN 34-0119320
PN 003
BRUSH WELLMAN INC.
SAVINGS & INVESTMENT PLAN
DECEMBER 31, 1997
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES:
<TABLE>
<CAPTION>
CURRENT
INVESTMENTS DESCRIPTION COST VALUE
----------- ----------- ---- -----
<S> <C> <C> <C>
Brush Wellman Inc. Common Stock Common Stock $22,143,106 $27,805,344
Janus Fund Mutual Fund $12,892,394 $13,986,318
Templeton Fund Mutual Fund $6,678,891 $6,897,662
PFAMCO Equity Income Fund Mutual Fund $8,273,176 $9,583,620
Northern Trust Collective Stock Index Fund Mutual Fund $10,773,413 $14,505,606
Vanguard Asset Allocation Fund Mutual Fund $7,760,450 $8,873,272
PIMCO Total Return Fund Mutual Fund $6,900,971 $7,202,491
Northern Trust Short-Term Investment Fund Bank Common/ $6,422,214 $6,422,214
Collective Trust
Participant Promissory Notes Participant Loans $3,498,440 $3,498,440
Employee Benefit Money Market Fund Bank Common/ $134,905 $134,905
Collective Trust
</TABLE>
17
<PAGE> 20
BRUSH WELLMAN INC.
SAVINGS & INVESTMENT PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
PURCHASES SALES
--------------------------- --------------------------------
TRANSACTION DESCRIPTION # TRANS COST # TRANS PROCEEDS GAIN/(LOSS)
<S> <C> <C> <C> <C> <C>
Brush Wellman Inc. Common Stock 31 $2,435,779.51 21 $1,420,909.45 $76,901.48
Janus Fund 107 9,477,705.19 89 1,077,406.69 281,311.75
Northern Trust Collective Stock Index Fund 126 4,445,557.80 69 1,130,876.67 485,402.99
PIMCO Total Return Fund 77 2,270,873.38 71 1,673,916.65 88,134.04
</TABLE>
18
<PAGE> 21
[WESLEY, MILLS & COMPANY LETTERHEAD]
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Annual
Report on Form 10-K under the Securities Exchange Act of 1934 of Brush Wellman
Inc. for the year ended December 31, 1997 of our report dated March 11, 1998,
with respect to the financial statements and schedules of the Brush Wellman Inc.
Savings and Investment Plan included in this Annual Report (11-K) for the year
ended December 31, 1997.
Wesley, Mills & Company
/s/ Wesley, Mills & Company
Cleveland, Ohio
March 11, 1998
19
