<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
For the fiscal year ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
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
- --------------------
<TABLE>
<CAPTION>
Page No.
<S> <C>
1. Report of Independent Auditors 1
2. Statements of Financial Condition -
December 31, 1998 and December 31, 1997 2-3
3. Statements of Income and Changes in Plan Equity - Plan years ended
December 31, 1998, December 31, 1997 and December 31, 1996 4-6
4. Notes to Financial Statements 7-13
5. Schedules required to be filed under ERISA
a. Schedule of Assets held for Investment
Purposes 14
b. Schedule of Reportable Transactions 15
6. Consent of Independent Auditors 16
</TABLE>
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 28th day of June, 1999.
BRUSH WELLMAN INC.
SAVINGS AND INVESTMENT PLAN
By /s/ Dennis L. Habrat
----------------------------------
Member of the Administrative
Committee
<PAGE> 3
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, 1998 and 1997 and 1996. 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, 1998 and 1997, the
results of its operations and changes in its plan equity for the years ended
December 31, 1998 and 1997 and 1996 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, 1998 and reportable transactions
for the year ended December 31, 1998 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.
/s/ MILLS, POTOCZAK & COMPANY
June 1, 1999
<PAGE> 4
BRUSH WELLMAN INC.
SAVINGS AND INVESTMENT PLAN
STATEMENT OF FINANCIAL CONDITION
DECEMBER 31, 1998
<TABLE>
<CAPTION>
S&P 500
ASSETS GROWTH INTERNATIONAL INCOME INDEX
- ---------------------------------------------- -------------- ---------------------- ------------------- ------------------
<S> <C> <C> <C> <C>
Brush Wellman Inc. Common Stock
(cost $24,077,018)
Janus Fund
(cost $13,933,288) $19,412,400
Templeton Foreign Fund
(cost $7,180,217) $6,375,796
PFAMCO Equity Income Fund
(cost $9,537,778) $10,031,657
Northern Trust Collective Stock Index Fund
(cost $12,696,007) $18,079,379
Vanguard Asset Allocation Fund
(cost $9,901,560)
PIMCO Total Return Fund
(cost $8,898,619)
Northern Trust Short-Term Investment Fund
(cost $7,904,531)
Participant Promissory Notes
(cost $3,706,855)
Employee Benefits Money Market Fund
(cost $54,656)
------------------ ---------------------- ------------------- -------------------
19,412,400 6,375,796 10,031,657 18,079,379
Contribution Receivable:
Company
401(k) 53,619 24,258 29,223 43,200
Participant
------------------ ---------------------- ------------------- -------------------
53,619 24,258 29,223 43,200
Dividends Receivable
Interest Receivable
Other
------------------ ---------------------- ------------------- -------------------
0 0 0 0
------------------ ---------------------- ------------------- -------------------
TOTAL ASSETS $19,466,019 $6,400,054 $10,060,880 $18,122,579
================== ====================== =================== ===================
LIABILITIES & PLAN EQUITY
Liabilities:
Benefits Payable
Other
Plan Equity 19,466,019 6,400,054 10,060,880 18,122,579
------------------ ---------------------- ------------------- -------------------
TOTAL LIABILITIES & PLAN EQUITY $19,466,019 $6,400,054 $10,060,880 $18,122,579
================== ====================== =================== ===================
</TABLE>
<TABLE>
<CAPTION>
ASSET FIXED MONEY
ASSETS ALLOCATION INCOME MARKET
- ---------------------------------------------------------- ----------------------- ----------------- -----------------
<S> <C> <C> <C>
Brush Wellman Inc. Common Stock
(cost $24,077,018)
Janus Fund
(cost $13,933,288)
Templeton Foreign Fund
(cost $7,180,217)
PFAMCO Equity Income Fund
(cost $9,537,778)
Northern Trust Collective Stock Index Fund
(cost $12,696,007)
Vanguard Asset Allocation Fund
(cost $9,901,560) $12,128,529
PIMCO Total Return Fund
(cost $8,898,619) $8,968,991
Northern Trust Short-Term Investment Fund
(cost $7,904,531) $7,845,440
Participant Promissory Notes
(cost $3,706,855)
Employee Benefits Money Market Fund
(cost $54,656)
----------------------- ----------------- -----------------
12,128,529 8,968,991 7,845,440
Contribution Receivable:
Company
401(k) 28,613 19,837 13,179
Participant
----------------------- ----------------- -----------------
28,613 19,837 13,179
Dividends Receivable
Interest Receivable 47,239 33,981
Other
----------------------- ----------------- -----------------
0 47,239 33,981
----------------------- ----------------- -----------------
TOTAL ASSETS $12,157,142 $9,036,067 $7,892,600
======================= ================= =================
LIABILITIES & PLAN EQUITY
Liabilities:
Benefits Payable
Other
Plan Equity 12,157,142 9,036,067 7,892,600
----------------------- ----------------- -----------------
TOTAL LIABILITIES & PLAN EQUITY $12,157,142 $9,036,067 $7,892,600
======================= ================= =================
</TABLE>
<TABLE>
<CAPTION>
STOCK PAYSOP LOAN
ASSETS FUND FUND FUND TOTAL
- ------------------------------------------------ --------------- -------------------- -------------------- -----
<S> <C> <C> <C> <C>
Brush Wellman Inc. Common Stock
(cost $24,077,018) $21,082,578 $219,311 $21,301,889
Janus Fund
(cost $13,933,288) 19,412,400
Templeton Foreign Fund
(cost $7,180,217) 6,375,796
PFAMCO Equity Income Fund
(cost $9,537,778) 10,031,657
Northern Trust Collective Stock Index Fund
(cost $12,696,007) 18,079,379
Vanguard Asset Allocation Fund
(cost $9,901,560) 12,128,529
PIMCO Total Return Fund
(cost $8,898,619) 8,968,991
Northern Trust Short-Term Investment Fund
(cost $7,904,531) 7,845,440
Participant Promissory Notes
(cost $3,706,855) $3,706,855 3,706,855
Employee Benefits Money Market Fund
(cost $54,656) 53,659 997 54,656
---------------- -------------------- -------------------- ----------------
21,136,237 220,308 3,706,855 107,905,592
Contribution Receivable:
Company 77,771 77,771
401(k) 20,814 232,743
Participant 0
---------------- -------------------- -------------------- ----------------
98,585 0 0 310,514
Dividends Receivable 144,435 1,509 145,944
Interest Receivable 529 6 81,755
Other 0
---------------- -------------------- -------------------- ----------------
144,964 1,515 0 227,699
---------------- -------------------- -------------------- ----------------
TOTAL ASSETS $21,379,786 $221,823 $3,706,855 $108,443,805
================ ==================== ==================== ================
LIABILITIES & PLAN EQUITY
Liabilities:
Benefits Payable 0
Other 0
Plan Equity 21,379,786 221,823 3,706,855 108,443,805
---------------- -------------------- -------------------- ----------------
TOTAL LIABILITIES & PLAN EQUITY $21,379,786 $221,823 $3,706,855 $108,443,805
================ ==================== ==================== ================
</TABLE>
See accompanying notes to financial statements.
2
<PAGE> 5
BRUSH WELLMAN INC.
SAVINGS AND INVESTMENT PLAN
STATEMENT OF FINANCIAL CONDITION
DECEMBER 31, 1997
<TABLE>
<CAPTION>
S&P 500
ASSETS GROWTH INTERNATIONAL INCOME INDEX
- ----------------------------------------------- ------------------ ---------------------- ----------------- ------------------
<S> <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)
PIMCO Total Return Fund
(cost $6,900,971)
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
Contribution Receivable:
Company
401(k)
Participant
------------------ ---------------------- ----------------- ------------------
0 0 0 0
Dividends Receivable
Interest Receivable
Other
------------------ ---------------------- ----------------- ------------------
0 0 0 0
------------------ ---------------------- ----------------- ------------------
TOTAL ASSETS $13,986,318 $6,897,662 $9,583,620 $14,505,606
================== ====================== ================= ==================
LIABILITIES & PLAN EQUITY
-------------------------
Liabilities:
Benefits Payable
Other
Plan Equity 13,986,318 6,897,662 9,583,620 14,505,606
------------------ ---------------------- ----------------- ------------------
TOTAL LIABILITIES & PLAN EQUITY $13,986,318 $6,897,662 $9,583,620 $14,505,606
================== ====================== ================= ==================
</TABLE>
<TABLE>
<CAPTION>
ASSET FIXED MONEY STOCK
ASSETS ALLOCATION INCOME MARKET FUND
- ---------------------------------------------- --------------------- ----------------- ----------------- ----------------------
<S> <C> <C> <C> <C>
Brush Wellman Inc. Common Stock
(cost $22,143,106) $27,483,732
Janus Fund
(cost $12,892,394)
Templeton Foreign Fund
(cost $6,678,891)
PFAMCO Equity Income Fund
(cost $8,273,176)
Northern Trust Collective Stock Index Fund
(cost $10,773,413)
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
Participant Promissory Notes
(cost $3,498,440)
Employee Benefits Money Market Fund
(cost $134,905) 133,782
--------------------- ----------------- ----------------- ----------------------
8,873,272 7,202,491 6,422,214 27,617,514
Contribution Receivable:
Company
401(k)
Participant
--------------------- ----------------- ----------------- ----------------------
0 0 0 0
Dividends Receivable 134,127
Interest Receivable 37,250 30,647 751
Other
--------------------- ----------------- ----------------- ----------------------
0 37,250 30,647 134,878
--------------------- ----------------- ----------------- ----------------------
TOTAL ASSETS $8,873,272 $7,239,741 $6,452,861 $27,752,392
===================== ================= ================= ======================
LIABILITIES & PLAN EQUITY
-------------------------
Liabilities:
Benefits Payable
Other
Plan Equity 8,873,272 7,239,741 6,452,861 27,752,392
--------------------- ----------------- ----------------- ----------------------
TOTAL LIABILITIES & PLAN EQUITY $8,873,272 $7,239,741 $6,452,861 $27,752,392
===================== ================= ================= ======================
</TABLE>
<TABLE>
<CAPTION>
PAYSOP LOAN
ASSETS FUND FUND TOTAL
- ----------------------------------------------- -------------------------- -------------------------- -----
<S> <C> <C> <C>
Brush Wellman Inc. Common Stock
(cost $22,143,106) $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
Participant Promissory Notes
(cost $3,498,440) $3,498,440 3,498,440
Employee Benefits Money Market Fund
(cost $134,905) 1,123 134,905
-------------------------- -------------------------- --------------------------
322,735 3,498,440 98,909,872
Contribution Receivable:
Company 0
401(k) 0
Participant 0
-------------------------- -------------------------- --------------------------
0 0 0
Dividends Receivable 1,575 135,702
Interest Receivable 5 68,653
Other 0
-------------------------- -------------------------- --------------------------
1,580 0 204,355
-------------------------- -------------------------- --------------------------
TOTAL ASSETS $324,315 $3,498,440 $99,114,227
========================== ========================== ==========================
LIABILITIES & PLAN EQUITY
-------------------------
Liabilities:
Benefits Payable 0
Other 0
Plan Equity 324,315 3,498,440 99,114,227
-------------------------- -------------------------- --------------------------
TOTAL LIABILITIES & PLAN EQUITY $324,315 $3,498,440 $99,114,227
========================== ========================== ==========================
</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, 1998
<TABLE>
<CAPTION>
S&P 500
GROWTH INTERNATIONAL INCOME INDEX
------ ------------- ------ -----
<S> <C> <C> <C> <C>
Investment Income:
Dividends $513,121 $58,622 $1,364,729 $225,661
Interest
Other Income (Expense) 628,071 1,087,253
----------------- ------------------------ ------------------- ------------------
513,121 686,693 1,364,729 1,312,914
Realized Gain (Loss) on
Investments--Note E 551,183 (37,448) 224,750 1,109,222
Unrealized Appreciation (Depreciation)
on Investments--Note F 4,385,188 (1,023,193) (816,565) 1,651,179
Contributions--Note B
Company
401(k) 1,707,194 840,593 918,092 1,320,950
----------------- ------------------------ ------------------- ------------------
1,707,194 840,593 918,092 1,320,950
Investment Election Change:
7/1/96 Plan Change
Current Year Changes (867,592) (665,128) (662,920) (642,554)
Loan Transfers (62,329) 59,951 45,653 (84,556)
Withdrawals and
Terminations--Note C 747,064 359,076 596,479 1,050,182
----------------- ------------------------ ------------------- ------------------
Income and Changes in Plan Equity 5,479,701 (497,608) 477,260 3,616,973
Plan Equity at Beginning of the Year 13,986,318 6,897,662 9,583,620 14,505,606
----------------- ------------------------ ------------------- ------------------
Plan Equity at End of the Year $19,466,019 $6,400,054 $10,060,880 $18,122,579
================= ======================== =================== ==================
</TABLE>
<TABLE>
<CAPTION>
ASSET FIXED MONEY STOCK
ALLOCATION INCOME MARKET FUND
---------- ------ ------ ----
<S> <C> <C> <C> <C>
Investment Income:
Dividends $353,888 $554,137
Interest 802,342 371,411 8,351
Other Income (Expense) 550,368 66,839
-------------------- ------------------ ------------------ ---------------------
904,256 802,342 371,411 629,327
Realized Gain (Loss) on
Investments--Note E 382,634 107,657 342,212
Unrealized Appreciation (Depreciation)
on Investments--Note F 1,114,148 (183,907) (8,351,270)
Contributions--Note B
Company 2,369,035
401(k) 849,234 604,554 379,519 539,502
-------------------- ------------------ ------------------ ---------------------
849,234 604,554 379,519 2,908,537
Investment Election Change:
7/1/96 Plan Change
Current Year Changes 730,096 1,043,600 1,687,428 (615,817)
Loan Transfers 2,219 79,748 (51,729) (34,336)
Withdrawals and
Terminations--Note C 698,717 657,668 946,890 1,251,259
-------------------- ------------------ ------------------ ---------------------
Income and Changes in Plan Equity 3,283,870 1,796,326 1,439,739 (6,372,606)
Plan Equity at Beginning of the Year 8,873,272 7,239,741 6,452,861 27,752,392
-------------------- ------------------ ------------------ ---------------------
Plan Equity at End of the Year $12,157,142 $9,036,067 $7,892,600 $21,379,786
==================== ================== ================== =====================
</TABLE>
<TABLE>
<CAPTION>
PAYSOP LOAN
FUND FUND TOTAL
---- ---- -----
<S> <C> <C> <C>
Investment Income:
Dividends $6,093 $3,076,251
Interest 70 $271,362 1,453,536
Other Income (Expense) (1,294) 2,331,237
------------------ ------------------- ---------------------
4,869 271,362 6,861,024
Realized Gain (Loss) on
Investments--Note E (1,325) 2,678,885
Unrealized Appreciation (Depreciation)
on Investments--Note F (86,167) (3,310,587)
Contributions--Note B
Company 2,369,035
401(k) 7,159,638
------------------ ------------------- ---------------------
9,528,673
Investment Election Change:
7/1/96 Plan Change
Current Year Changes (7,113)
Loan Transfers 45,379
Withdrawals and
Terminations--Note C 12,756 108,326 6,428,417
------------------ ------------------- ---------------------
Income and Changes in Plan Equity (102,492) 208,415 9,329,578
Plan Equity at Beginning of the Year 324,315 3,498,440 99,114,227
------------------ ------------------- ---------------------
Plan Equity at End of the Year $221,823 $3,706,855 $108,443,805
================== =================== =====================
</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, 1997
<TABLE>
<CAPTION>
S&P 500
GROWTH INTERNATIONAL INCOME INDEX
------ ------------- ------ -----
<S> <C> <C> <C> <C>
Investment Income:
Dividends $589,960 $322,339 $244,109 $196,820
Interest 506 293 342 542
Other Income (Expense) 1,734,370 429,223 1,140,446 1,019,158
----------------- ------------------------ ------------------ --------------------
2,324,836 751,855 1,384,897 1,216,520
Realized Gain (Loss) on
Investments--Note E 281,312 151,331 128,931 485,403
Unrealized Appreciation (Depreciation)
on Investments--Note F (133,969) (476,424) 696,051 1,655,317
Contributions--Note B
Company
401(k) 1,495,850 881,985 768,668 1,073,326
----------------- ------------------------ ------------------ --------------------
1,495,850 881,985 768,668 1,073,326
Investment Election Change:
7/1/96 Plan Change
Current Year Changes (100,358) (104,166) 509,790 898,543
Loan Transfers 32,148 62,807 6,952 (93,106)
Unallocated Loan Payments
Withdrawals and
Terminations--Note C 282,152 399,028 426,305 355,993
----------------- ------------------------ ------------------ --------------------
Income and Changes in Plan Equity 3,617,667 868,360 3,068,984 4,880,010
Plan Equity at Beginning of the Year 10,368,651 6,029,302 6,514,636 9,625,596
----------------- ------------------------ ------------------ --------------------
Plan Equity at End of the Year $13,986,318 $6,897,662 $9,583,620 $14,505,606
================= ======================== ================== ====================
</TABLE>
<TABLE>
<CAPTION>
ASSET FIXED MONEY STOCK
ALLOCATION INCOME MARKET FUND
---------- ------ ------ ----
<S> <C> <C> <C> <C>
Investment Income:
Dividends $285,646 $512,954
Interest 319 426,821 376,814 16,269
Other Income (Expense) 391,483 178,664 23,624
-------------------- ------------------ ------------------ ----------------------
677,448 605,485 376,814 552,847
Realized Gain (Loss) on
Investments--Note E 154,090 88,134 129,878
Unrealized Appreciation (Depreciation)
on Investments--Note F 1,073,388 (25,567) 8,830,479
Contributions--Note B
Company 2,113,241
401(k) 702,802 569,428 384,661 440,310
-------------------- ------------------ ------------------ ----------------------
702,802 569,428 384,661 2,553,551
Investment Election Change:
7/1/96 Plan Change
Current Year Changes 140,557 (347,350) 151,572 (1,134,258)
Loan Transfers 743 (32,498) (41,032) (37,296)
Unallocated Loan Payments
Withdrawals and
Terminations--Note C 766,569 284,751 1,206,927 1,114,922
-------------------- ------------------ ------------------ ----------------------
Income and Changes in Plan Equity 1,982,459 572,881 (334,912) 9,780,279
Plan Equity at Beginning of the Year 6,890,813 6,666,860 6,787,773 17,972,113
-------------------- ------------------ ------------------ ----------------------
Plan Equity at End of the Year $8,873,272 $7,239,741 $6,452,861 $27,752,392
==================== ================== ================== ======================
</TABLE>
<TABLE>
<CAPTION>
PAYSOP LOAN
FUND FUND TOTAL
---- ---- -----
<S> <C> <C> <C>
Investment Income:
Dividends $6,170 $2,157,998
Interest 397 $253,118 1,075,421
Other Income (Expense) (1,557) 4,915,411
--------------------- --------------------- ---------------------
5,010 253,118 8,148,830
Realized Gain (Loss) on
Investments--Note E (52,977) 1,366,102
Unrealized Appreciation (Depreciation)
on Investments--Note F 163,010 11,782,285
Contributions--Note B
Company 2,113,241
401(k) 6,317,030
--------------------- --------------------- ---------------------
8,430,271
Investment Election Change:
7/1/96 Plan Change
Current Year Changes (14,330)
Loan Transfers 67,743 (33,539)
Unallocated Loan Payments 33,539 33,539
Withdrawals and
Terminations--Note C 14,202 112,842 4,963,691
--------------------- --------------------- ---------------------
Income and Changes in Plan Equity 86,511 241,558 24,763,797
Plan Equity at Beginning of the Year 237,804 3,256,882 74,350,430
--------------------- --------------------- ---------------------
Plan Equity at End of the Year $324,315 $3,498,440 $99,114,227
===================== ===================== =====================
</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, 1996
<TABLE>
<CAPTION>
S&P 500
GROWTH INTERNATIONAL INCOME INDEX
------ ------------- ------ -----
<S> <C> <C> <C> <C>
Investment Income:
Dividends $78,618 $155,189 $284,737 $196,318
Interest 40
Other Income (Expense) 1,103,696 100,887 823,796 487,760
------------------ ------------------------ ----------------- -----------------
1,182,314 256,076 1,108,533 684,118
Realized Gain (Loss) on
Investments--Note E 156,231 72,722 125,283 235,967
Unrealized Appreciation (Depreciation)
on Investments--Note F 224,826 567,238 (75,051) 791,262
Contributions--Note B
Company
401(k) 1,235,328 768,459 633,965 771,948
------------------ ------------------------ ----------------- -----------------
1,235,328 768,459 633,965 771,948
Investment Election Change:
7/1/96 Plan Change
Current Year Changes 693,444 (279,414) 298,540 531,373
Loan Transfers 5,708 4,535 (34,396) 5,128
Unallocated Loan Payments
Withdrawals and
Terminations--Note C 396,728 134,326 322,488 448,605
------------------ ------------------------ ----------------- -----------------
Income and Changes in Plan Equity 3,101,123 1,255,290 1,734,386 2,571,191
Plan Equity at Beginning of the Year 7,267,528 4,774,012 4,780,250 7,054,405
------------------ ------------------------ ----------------- -----------------
Plan Equity at End of the Year $10,368,651 $6,029,302 $6,514,636 $9,625,596
================== ======================== ================= =================
</TABLE>
<TABLE>
<CAPTION>
ASSET ASSET FIXED MONEY
ALLOCATION ALLOCATION INCOME MARKET
---------- ---------- ------ ------
<S> <C> <C> <C> <C>
Investment Income:
Dividends $59,791 $184,120
Interest 429,974 346,350
Other Income (Expense) 30,426 372,533
-------------------- ------------------- ----------------- -----------------
90,217 556,653 429,974 346,350
Realized Gain (Loss) on
Investments--Note E 470,725 4,310 53,664
Unrealized Appreciation (Depreciation)
on Investments--Note F (312,645) 39,434 (199,966)
Contributions--Note B
Company
401(k) 338,277 282,974 619,396 423,544
-------------------- ------------------- ----------------- -----------------
338,277 282,974 619,396 423,544
Investment Election Change:
7/1/96 Plan Change (5,927,322) 5,927,322
Current Year Changes (272,484) 168,495 (544,791) (57,542)
Loan Transfers 12,176 (13,856) 16,034 (93,033)
Unallocated Loan Payments
Withdrawals and
Terminations--Note C 209,694 74,519 279,031 427,521
-------------------- ------------------- ----------------- -----------------
Income and Changes in Plan Equity (5,810,750) 6,890,813 95,280 191,798
Plan Equity at Beginning of the Year 5,810,750 0 6,571,580 6,595,975
-------------------- ------------------- ----------------- -----------------
Plan Equity at End of the Year $0 $6,890,813 $6,666,860 $6,787,773
==================== =================== ================= =================
</TABLE>
<TABLE>
<CAPTION>
STOCK PAYSOP LOAN
FUND FUND FUND TOTAL
---- ---- ---- -----
<S> <C> <C> <C> <C>
Investment Income:
Dividends $442,822 $7,080 $1,408,675
Interest 6,117 1,118 $251,904 1,035,503
Other Income (Expense) 1,374 (1,469) 2,919,003
-------------------- -------------------- -------------------- --------------------
450,313 6,729 251,904 5,363,181
Realized Gain (Loss) on
Investments--Note E (45,347) 1,073,555
Unrealized Appreciation (Depreciation)
on Investments--Note F (998,240) (11,142) 25,716
Contributions--Note B
Company 1,910,402 1,910,402
401(k) 401,965 5,475,856
-------------------- -------------------- -------------------- --------------------
2,312,367 7,386,258
Investment Election Change:
7/1/96 Plan Change
Current Year Changes (531,725) (5,896)
Loan Transfers (107,585) 82,865 (122,424)
Unallocated Loan Payments (87,732) (87,732)
Withdrawals and
Terminations--Note C 774,613 11,168 92,213 3,170,906
-------------------- -------------------- -------------------- --------------------
Income and Changes in Plan Equity 305,170 (21,477) 154,824 10,467,648
Plan Equity at Beginning of the Year 17,666,943 259,281 3,102,058 63,882,782
-------------------- -------------------- -------------------- --------------------
Plan Equity at End of the Year $17,972,113 $237,804 $3,256,882 $74,350,430
==================== ==================== ==================== ====================
</TABLE>
See accompanying notes to financial statements.
6
<PAGE> 9
NOTES TO FINANCIAL STATEMENTS
BRUSH WELLMAN INC.
SAVINGS AND INVESTMENT PLAN
DECEMBER 31, 1998, DECEMBER 31, 1997 AND DECEMBER 31, 1996
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 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.
The Plan reclassified certain capital gain distributions as investment
income for the years ended December 31, 1997 and 1996.
NOTE B - The Plan is a defined contribution plan which covers certain eligible
employees of Brush Wellman Inc. (Company).
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 $10,000 in
1998, $9,500 in 1997 and $9,500 in 1996. All employee and Company matching
contributions are fully vested at all times.
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%. 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.
7
<PAGE> 10
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 1,313 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
869 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 925 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 Standand & 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 1,171 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 911 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 632 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 497 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 1,828 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.
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
8
<PAGE> 11
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 1998, 1997, and 1996 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.
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.
9
<PAGE> 12
NOTE D - Shares of face value by investment as of December 31, 1998 and December
31, 1997 are as follows:
<TABLE>
<CAPTION>
Shares By Investment
-----------------------------
Investment 1998 1997
---------- ---- ----
<S> <C> <C>
Janus Fund 576,891 561,700
Templeton Fund 759,928 693,232
PFAMCO Equity Income Fund 701,024 629,259
Northern Trust Collective Stock
Index Fund 803,885 767,899
Vanguard Asset Allocation Fund 497,479 421,533
PIMCO Total Return Fund 850,948 679,480
Northern Trust Short-Term
Investment Fund 7,879,421 6,422,213
Brush Wellman Inc. Common Stock 1,218,954 1,134,912
Employee Benefit Money Market Fund 54,656 134,905
</TABLE>
In addition, $3,706,855 and $3,498,440 were invested in Participant Promissory
Notes as of December 31, 1998 and December 31, 1997, respectively.
10
<PAGE> 13
NOTE E: The net realized gain (loss) on sales of investments for the Plan years
ended December 31, 1998, December 31, 1997 and December 31, 1996 is as follows:
<TABLE>
<CAPTION>
1998
----------------------------------------------------------------
Investment Shares Cost Proceeds Gain(Loss)
---------- ------ ---- -------- ----------
<S> <C> <C> <C> <C>
Janus Fund 112,076 $2,629,158 $3,180,340 $551,183
Templeton Fund 175,388 1,693,106 1,655,658 (37,448)
PFAMCO Equity Income Fund 124,811 1,677,872 1,902,621 224,750
Northern Trust Collective Stock
Index Fund 181,760 2,695,723 3,804,945 1,109,222
Vanguard Asset Allocation Fund 93,090 1,784,767 2,167,401 382,634
PIMCO Total Return Fund 218,312 2,242,090 2,349,747 107,657
Brush Wellman Inc. Common Stock 73,635 1,449,860 1,790,747 340,887
----------------
$2,678,885
================
</TABLE>
<TABLE>
<CAPTION>
1997
----------------------------------------------------------------
Investment Shares Cost Proceeds Gain
---------- ------ ---- -------- ----
<S> <C> <C> <C> <C>
Janus Fund 48,746 $1,077,407 $1,358,719 $281,312
Templeton Fund 92,636 877,911 1,029,242 151,331
PFAMCO Equity Income Fund 41,321 520,442 649,373 128,931
Northern Trust Collective Stock
Index Fund 87,600 1,130,877 1,616,280 485,403
Vanguard Asset Allocation Fund 72,313 1,299,597 1,453,687 154,090
PIMCO Total Return Fund 169,306 1,673,917 1,762,051 88,134
Brush Wellman Inc. Common Stock 69,353 1,420,909 1,497,811 76,901
----------------
$1,366,102
================
</TABLE>
<TABLE>
<CAPTION>
1996
----------------------------------------------------------------
Investment Shares Cost Proceeds Gain(Loss)
---------- ------ ---- -------- ----------
<S> <C> <C> <C> <C>
Janus Fund 32,450 $665,430 $821,661 $156,231
Templeton Fund 97,393 879,703 952,425 72,722
PFAMCO Equity Income Fund 54,403 640,837 766,120 125,283
Northern Trust Collective Stock
Index Fund 75,307 872,895 1,108,862 235,967
Phoenix Total Return Fund 396,623 6,033,647 6,504,372 470,725
Vanguard Asset Allocation Fund 8,232 146,556 150,866 4,310
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)
----------------
$1,073,555
================
</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 (losses) under the current cost method for the
year ended December 31, 1998 are as follows:
<TABLE>
<CAPTION>
Realized
Gain/(Loss)
----------------
<S> <C>
Brush Wellman Inc. Common Stock $336,458
Janus Fund 607,915
Templeton Fund (34,100)
PFAMCO Equity Income Fund 261,666
Northern Trust Collective Stock Index Fund 1,254,905
Vanguard Asset Allocation Fund 453,617
PIMCO Total Return Fund 120,550
----------------
$3,001,011
================
</TABLE>
11
<PAGE> 14
NOTE F - The unrealized appreciation (depreciation) of investments for the Plan
years ended December 31, 1998, December 31, 1997 and December 31, 1996 is as
follows:
<TABLE>
<CAPTION>
Balance Balance
January 1 December 31
1998 Change 1998
-------------- --------------- ---------------
<S> <C> <C> <C>
Janus Fund $1,093,923 $4,385,188 $5,479,111
Templeton Fund 218,772 (1,023,193) (804,421)
PFAMCO Equity Income Fund 1,310,444 (816,565) 493,879
Northern Trust Collective Stock Index Fund 3,732,193 1,651,179 5,383,372
Vanguard Asset Allocation Fund 1,112,822 1,114,148 2,226,970
PIMCO Total Return Fund 301,521 (183,907) 117,614
Brush Wellman Inc. Common Stock 5,662,239 (8,437,437) (2,775,198)
---------------
($3,310,587)
===============
</TABLE>
<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>
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, 1998
are as follows:
<TABLE>
<CAPTION>
CHANGE IN
UNREALIZED GAIN/(LOSS)
---------------------------
<S> <C>
Janus Fund $4,328,456
Templeton Fund (1,026,541)
PFAMCO Equity Income Fund (853,481)
Northern Trust Collective Stock Index Fund 1,505,496
Vanguard Asset Allocation Fund 1,043,165
PIMCO Total Return Fund (196,800)
Brush Wellman Inc. Common Stock (8,432,937)
---------------
($3,632,642)
===============
</TABLE>
12
<PAGE> 15
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. There have been subsequent
amendments numbered 1 through 8, all generally effective before December 31,
1998. These amendments provide for certain provisions concerning member
contributions, distributions, key employee testing, covered employees and
changes required by current regulations.
13
<PAGE> 16
BRUSH WELLMAN INC.
SAVINGS & INVESTMENT PLAN
DECEMBER 31, 1998
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 $24,077,018 $21,301,889
Janus Fund Mutual Fund $13,933,288 $19,412,400
Templeton Fund Mutual Fund $7,180,217 $6,375,796
PFAMCO Equity Income Fund Mutual Fund $9,537,778 $10,031,657
Northern Trust Collective Stock Index Fund Mutual Fund $12,696,007 $18,079,379
Vanguard Asset Allocation Fund Mutual Fund $9,901,560 $12,128,529
PIMCO Total Return Fund Mutual Fund $8,898,619 $8,968,991
Northern Trust Short-Term Investment Fund Bank Common/ $7,904,531 $7,845,440
Collective Trust
Participant Promissory Notes Participant Loans $3,706,855 $3,706,855
Employee Benefit Money Market Fund Bank Common/ $54,656 $54,656
Collective Trust
</TABLE>
14
<PAGE> 17
BRUSH WELLMAN INC.
SAVINGS & INVESTMENT PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
PURCHASES
-------------------------------
IDENTITY OF PARTY INVOLVED DESCRIPTION OF ASSET # TRANS COST
- -------------------------- -------------------- ------- ----
<S> <C> <C> <C>
Brush Wellman Inc. Common Stock Common Stock 33 $3,701,902.44
Janus Fund Mutual Fund 114 3,670,051.25
Northern Trust Collective Stock Index Fund Mutual Fund 124 4,618,317.19
PIMCO Total Return Fund Mutual Fund 102 4,192,499.13
Vanguard Asset Allocation Fund Mutual Fund 118 3,925,875.76
</TABLE>
<TABLE>
<CAPTION>
SALES
--------------------------------------------------------------------
IDENTITY OF PARTY INVOLVED # TRANS PROCEEDS COST GAIN
- -------------------------- ------- -------- ---- ----
<S> <C> <C> <C> <C>
Brush Wellman Inc. Common Stock 29 $1,790,746.59 $1,449,860.02 $340,886.57
Janus Fund 100 3,180,340.38 2,629,157.70 551,182.68
Northern Trust Collective Stock Index Fund 101 3,804,945.16 2,695,723.03 1,109,222.13
PIMCO Total Return Fund 70 2,349,747.43 2,242,090.35 107,657.08
Vanguard Asset Allocation Fund 72 2,167,400.84 1,784,766.55 382,634.29
</TABLE>
15
<PAGE> 18
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the registration statement on
Form S-8 under the Securities Exchange Act of 1933 of Brush Wellman Inc. for the
year ended December 31, 1998 of our report dated June 1, 1999, 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, 1998.
/s/ MILLS, POTOCZAK & COMPANY
Cleveland, Ohio
June 1, 1999
16
