EXHIBIT 10.2

BRUSH ENGINEERED MATERIALS INC.

2005 DEFERRED COMPENSATION PLAN FOR NONEMPLOYEE DIRECTORS

(EFFECTIVE JANUARY 1, 2005)

Recitals

1. Brush Engineered Materials Inc. (the “Company”) has suspended the 1992 Brush
Engineered Materials Inc. Deferred Compensation Plan for Nonemployee Directors
(As Amended as of May 16, 2000) and as further amended by Amendments No. 1,
No. 2, and No. 3.

2. The American Jobs Creation Act of 2004, P.L. 108-357 (the “AJCA”) added a new
Section 409A to the Internal Revenue Code of 1986, as amended (the “Code”),
which significantly changed the Federal tax law applicable to “amounts deferred”
under nonqualified deferred compensation plans after December 31, 2004;

3. Pursuant to the AJCA, the Secretary of the Treasury and the Internal Revenue
Service will issue proposed, temporary or final regulations and/or other
guidance with respect to the provisions of new Section 409A of the Code
(collectively, the “AJCA Guidance”);

4. The AJCA Guidance has not yet been issued; and

5. The Company now desires to adopt a new deferred compensation plan for
nonemployee directors, effective January 1, 2005.

ARTICLE I

INTRODUCTION

1.1. Purpose of the Plan. The purpose of the Brush Engineered Materials Inc.
2005 Deferred Compensation Plan for Nonemployee Directors is to provide the
nonemployee Directors of the Company with the opportunity to defer receipt of
compensation payable for services as a Director and to help solidify the common
interest of Directors and shareholders in enhancing the value of the Company’s
Common Shares.

1.2. American Jobs Creation Act (AJCA).

(a) It is intended that the Plan (including any amendments thereto) comply with
the provisions of Section 409A of the Code, as enacted by the AJCA, so as to
prevent the inclusion in gross income of any amount credited to a Director’s
Deferred Compensation Account hereunder in a taxable year that is prior to the
taxable year or years in which such amounts would otherwise be actually
distributed or made available to the Director. The Plan shall be administered in
a manner that will comply with Section 409A of the Code, including proposed,
temporary or final regulations or any other guidance issued by the Secretary of
the Treasury and the Internal Revenue Service with respect thereto (collectively
with the AJCA, the “AJCA Guidance”). Any Plan provision that would cause the
Plan to fail to satisfy Section 409A of the Code (including, without limitation,
any provisions of this Amendment No. 3) shall have no force and effect until
amended to comply with Code Section 409A (which amendment may be retroactive to
the extent permitted by the AJCA Guidance).

(b) The effective date of the Plan is January 1, 2005.

ARTICLE II

DEFINITIONS

As used herein, the following words shall have the meanings stated after them
unless otherwise specifically provided:

2.1. “Change in Control” shall have the meaning assigned thereto in Section 5.5
hereof.

2.2. “Committee” shall mean the Governance Committee of the Board of Directors.

2.3. “Common Shares” shall mean the Common Shares, without par value, of the
Company.

2.4. “Company” shall mean Brush Engineered Materials Inc.

2.5. “Deferred Compensation Account” shall have the meaning assigned thereto in
Section 3.1 hereof.

2.6. “Director” shall mean any nonemployee director of the Company.

2.7. “Insolvent” shall have the meaning assigned thereto in Section 6.2 hereof.

2.8. “Plan” shall mean the 2005 Brush Engineered Materials Inc. Deferred
Compensation Plan for Nonemployee Directors, as amended from time to time.

2.9. “Terminated Participant” shall have the meaning assigned thereto in
Section 8.3 hereof.

2.10. “Trust” shall have the meaning assigned thereto in Section 4.1 hereof.

2.11. “Trust Account” shall have the meaning assigned thereto in Section 4.2
hereof.

2.12. “Trust Agreement” shall mean the Trust Agreement entered into between the
Company and the Trustee in connection with the Plan.

2.13. “Trust Fund” shall have the meaning assigned thereto in Section 4.2
hereof.

2.14. “Trustee” shall mean such person or entity as may be chosen by the Company
from time to time to act as the trustee under the Trust Agreement, together with
the successors of such person or entity as may be provided in the Trust
Agreement.

ARTICLE III

ELECTIONS BY DIRECTORS

3.1. Compensation Reduction for 2005 and Later Years. Not later than December 31
of any calendar year, beginning with December 31, 2004 for the calendar year
2005, a Director may, by filing an annual written election with the Committee,
direct the Company (a) to reduce the compensation payable to him or her
(determined without regard to the provisions of this Section) for services as a
Director during the next calendar year in such amount as elected by the Director
and (b) to credit the amount of such reduction to the Director’s Deferred
Compensation Account.

3.2. Partial Years. If a Director first becomes a Director after January 1st of
any calendar year, the Director may, by filing a written election with the
Committee, direct the Company (a) to reduce the compensation payable to him or
her for future services as a Director during the year in such amount as elected
by the Director and (b) to credit the amount of such reduction to the Director’s
Deferred Compensation Account. Any such election shall be made within 30 days
after an individual becomes a Director, and shall apply only to compensation for
services as a Director performed after the date of such election.

3.3. Elections Irrevocable. All elections described in this Article shall be
made on an election form specified by the Committee and filed with the
Committee. Once an election becomes effective pursuant to this Article, such
election shall be irrevocable and shall remain in effect until the end of the
calendar year to which it relates.

3.4. Deferred Compensation Accounts. Each Director who has elected to have his
or her compensation reduced pursuant to this Article shall have a nonforfeitable
right to the balance from time to time of his or her Deferred Compensation
Account. Each Director’s Deferred Compensation Account shall be subdivided into
separate subaccounts for each year of participation. In addition to the credits
to a Director’s Deferred Compensation Account described in Sections 3.1, 3.2,
and 3.3 hereof, a Director’s Deferred Compensation Account (and the appropriate
subaccounts) shall be credited or debited with, amounts equal to the income,
earnings, gains or losses on the Trust Account maintained with respect to the
Director under the Trust Agreement at such times as such items are credited to
or debited from such Trust Account and shall be debited for any distributions to
the Director under Article V.

ARTICLE IV

ACCOUNTS AND INVESTMENTS

4.1. Contribution. (a) The Company shall from time to time transfer to the
Trustee to be held under the Trust Agreement in a trust (the “Trust”) cash funds
equal to the amounts by which Directors elect to have their compensation reduced
pursuant to this Plan. All such transfers shall be made within 30 days after
such compensation would have been paid to the Director but for the Director’s
compensation reduction election.

(b) Except as provided with respect to the creditors of the Company in
Article VI hereof, all contributions and other transfers by the Company to the
Trust pursuant to Section 4.1(a) hereof shall be irrevocable, and (except as so
provided) the Company shall have no right to the return of any funds so
contributed or transferred to the Trust or any earnings thereon.

4.2. Establishment and Adjustment of Accounts. The Trustee shall establish a
separate account under the Trust (a “Trust Account”) for any Director who defers
compensation pursuant to the Plan. As of December 31 of each year and on such
other dates as the Committee may direct, the fair market value of the assets of
the Trust allocated to all Trust Accounts (the “Trust Fund”) shall be determined
by the Trustee.

4.3. Investment of Assets. The assets of the Trust Fund shall be held by the
Trustee in the name of the Trust. As amounts are received by the Trustee, it
shall invest the funds pursuant to the Trust Agreement, which shall authorize
the Trustee to invest the funds contained in each Trust Account in Common
Shares.

4.4. Assets Held in Cash. The Trustee may, in its sole discretion, maintain in
cash such amounts as it deems necessary to meet the needs of the Trust from time
to time. Amounts maintained in cash by the Trustee shall be kept to a minimum
consistent with the duties and obligations of the Trustee as set forth in the
Trust Agreement and shall not be required to be invested at interest.

4.5. Trustee’s Fees. The fees and expenses of the Trustee under the Trust
Agreement shall be paid by the Company.

ARTICLE V

PAYMENT OF ACCOUNTS

5.1. Time of Payment. Distribution of each subaccount included in a Director’s
Deferred Compensation Account shall commence or be made in the manner described
in Section 5.2 hereof as soon as is reasonably practicable, but not later than
60 days, after the earlier of: (i) the date of termination of service as a
Director on account of resignation, retirement, death or otherwise, (ii) if so
specified on the Director’s election form for the particular year (or on the
2005 election form for all current Directors), the date the Director reaches the
age of 70 or older, or (iii) the occurrence of a Change in Control of the
Company. However, if the aggregate amount credited to any Director’s Deferred
Compensation Account is less than $17,500, the distribution of the Director’s
entire Deferred Compensation shall be in a lump sum on the applicable date.

5.2. Method of Distribution. Prior to December 31 of end year, beginning with
December 31, 2004, a Director shall file an annual election with the Committee
to specify whether amounts credited to his Deferred Compensation Account for the
following year shall be distributed to him or her (or his or her beneficiary) in
a single lump sum payment at the time described in Section 5.1, or in not more
than ten annual installments commencing at such time. The amounts credited to
the Director’s Deferred Compensation Account for such year shall be distributed
or commence to be distributed to the Director or the Director’s beneficiary at
the time described in Section 5.1 in the manner so specified. The amount of each
installment payment shall be calculated by dividing the amount credited to the
applicable subaccount in the Director’s Deferred Compensation Account at the
time of each such payment (as determined by the Committee) by the number of
remaining installments (including the current installment). If the Company is
not Insolvent at the time of any payment, the payment shall be made from the
Trust and charged to the Director’s Trust Account. The Common Shares shall be
distributed in kind.

5.3. Designation of Beneficiary. Each Director participating in this Plan shall
designate a beneficiary or beneficiaries to whom distribution shall be made
pursuant to Section 5.2 in the event of the death of the Director before his or
her entire Deferred Compensation Account is distributed. If there is no
designated beneficiary, or no designated beneficiary surviving at a Director’s
death the Director’s beneficiary shall be his or her estate. Beneficiary
designations shall be made in writing. A Director may designate a new
beneficiary or beneficiaries at any time by filing a new election with the
Committee.

5.4. Taxes. In the event any taxes are required by law to be withheld or paid
from any distributions made pursuant to the Plan, the Company or Trustee (as
applicable) shall deduct such amounts from such distributions and shall transmit
the withheld amounts to the appropriate taxing authority.

5.5. Definition of Change in Control. A “Change in Control” of the Company shall
have occurred if at any time any of the following events shall occur:

(a) The Board of Directors of the Company at any time shall fail to include a
majority of directors who are either “Original Directors” or “Approved
Directors”. An Original Director is a director who is serving on January 1,
1995. An Approved Director is a director who, after such date, is elected to the
Board of Directors of Brush Wellman Inc. or the Board of Directors of the
Company, or is nominated for election by the shareholders, by a vote of at least
two-thirds of the Original Directors and the previously elected Approved
Directors, if any;

(b) Any person (as the term “person” is defined in Section 1701.01(G) of the
Ohio Revised Code) shall have made a “control share acquisition” (as the term
“control share acquisition” is defined in Section 1701.01(Z) of the Ohio Revised
Code) of shares of the Company without having first complied with
Section 1701.831 of the Ohio Revised Code (dealing with control share
acquisitions); or

(c) The Board of Directors shall at any time determine in the good faith
exercise of its judgment that (i) any particular actual or proposed accumulation
of shares of the Company, tender offer for shares of the Company, merger,
consolidation, sale of assets, proxy contest, or other transaction or event or
series of transactions or events will, or is likely to, if carried out, result
in a Change in Control falling within Sections 5.5(a) or 5.5(b) hereof and
(ii) it is in the best interests of the Company and its shareholders, and will
serve the intended purposes of this Plan and the Trust, for distributions of
Deferred Compensation Accounts to commence immediately as herein provided.

ARTICLE VI

CREDITORS AND INSOLVENCY

6.1. Claims of the Company’s Creditors. All assets held in the Trust pursuant to
the Plan, and any payment to be made by the Trustee pursuant to the Plan and
Trust Agreement, shall be subject to the claims of the general creditors of the
Company, including judgment creditors and bankruptcy creditors. The rights of a
Director or his or her beneficiaries to any assets of the Trust Fund shall be no
greater than the rights of an unsecured creditor of the Company.

6.2. Notification of Insolvency. In the event the Company becomes Insolvent (as
hereinafter defined), the Board of Directors of the Company and the chief
executive officer of the Company shall immediately notify the Trustee of that
fact. The Trustee shall not make any payments from the Trust Fund to any
Director or any beneficiary under the Plan after such notification is received
or at any time after the Trustee has knowledge of such Insolvency. Under any
such circumstance, the Trustee shall deliver any property held in the Trust Fund
only as a court of competent jurisdiction may direct to satisfy the claims of
the Company’s creditors. For purposes of this Plan, the Company shall be deemed
to be “Insolvent” if the Company is subject to a pending voluntary or
involuntary proceeding as a debtor under the United States Bankruptcy Code, as
amended, or is unable to pay its debts as they mature.

ARTICLE VII

ADMINISTRATION

7.1. Powers of the Committee. The Committee shall administer the Plan and
resolve all questions of interpretation arising under the Plan. Whenever
elections, directions, designations, applications, requests or other notices are
to be given or made by a Director under the Plan, they shall be filed with the
Committee. Except as provided in Section 8.3 hereof, the Committee shall have no
discretion with respect to Plan contributions or distributions, but shall act in
an administrative capacity only.

7.2. Indemnity of Committee. The Company shall indemnify the members of the
Committee against all claims, losses, damages, expenses and liabilities arising
from any action or failure to act with respect to the Plan to the extent
provided in the Regulations of the Company and any applicable indemnification
agreement between the Company and such member.

ARTICLE VIII

MISCELLANEOUS

8.1. Funding. Neither any Director, nor his or her beneficiaries, nor his or her
heirs, successors or assigns, shall have any secured interest in or, claim on
any property or assets of the Company or the Trust. The Company’s obligation
under the Plan shall be merely that of an unfunded and unsecured promise of the
Company to pay money in the future. The Company shall create the Trust to hold
funds to be used in payment of its obligations under the Plan and to provide a
measure of the benefits payable to the Director hereunder, and shall fund such
Trust in accordance with the terms of the Plan, but all funds contained therein
shall remain subject to the claims of the Company’s general creditors as
provided in Article VI hereof.

8.2. Term of Plan. The Company reserves the right to amend the Plan or Trust
Agreement or terminate the Plan at any time; provided, however, that no
amendment or termination shall affect the rights of Directors to amounts
previously credited to their Deferred Compensation Accounts or to additional
credits to their Deferred Compensation Accounts pursuant to Section 3.4 hereof
for additional earnings of the Trust following such termination; and provided
further, that no amendment or termination shall apply to the then current plan
year, except as permitted under Section 409A of the Code. The Trust shall remain
in effect until such time as the entire corpus of the Trust Fund has been
distributed pursuant to the terms of the Plan, and the Plan shall remain in
effect until such time as all amounts credited to Directors’ Deferred
Compensation Accounts are distributed pursuant to Article V hereof.

8.3. Assignment. No right or interest of any Director or his or her beneficiary
(or any person claiming through or under such Director or his or her
beneficiary) in any benefit or payment herefrom shall be assignable or
transferable in any manner or be subject to alienation, anticipation, sale,
pledge, encumbrance or other legal process or in any manner be liable for or
subject to the debts or liabilities of such Director.

If any Director or any such person (other than the surviving spouse of such
Director after he or she is deceased) shall attempt to or shall transfer,
assign, alienate, anticipate, sell, pledge or otherwise encumber his or her
benefits hereunder or any part thereof, or if by reason of his or her bankruptcy
or other event happening at any time such benefits would devolve upon anyone
else or would not be enjoyed by him or her, then the Committee, in its
discretion, may terminate his or her interest in any such benefit, to the extent
the Committee considers necessary or advisable to prevent or limit the effects
of such occurrence, by filing a written “termination declaration” with the
Committee records and making reasonable efforts to deliver a copy to such
Director or his or her beneficiary whose interest is adversely affected (the
“Terminated Participant”).

As long as any Terminated Participant is alive, any benefits affected by the
termination declaration shall be retained by the Company and, in the Committee’s
sole and absolute judgment, may be paid to or expended for the benefit of such
Terminated Participant, his or her spouse, his or her children or any other
person or persons in fact dependent upon him or her in such a manner as the
Committee shall deem proper. Upon the death of any Terminated Participant, all
benefits withheld from him or her and not paid to others in accordance with the
preceding sentence shall be distributed to such Terminated Participant’s
surviving spouse or, if there is no surviving spouse, to such Terminated
Participant’s then living descendants, including adopted children, per stirpes,
or if there is no surviving spouse and no surviving descendants, to such
Terminated Participant’s estate. Payments described in this paragraph shall be
made from the Trust if the Company is not Insolvent at the time for any such
payment.

8.4. Tax Effect. This Plan is intended to be treated as an unfunded deferred
compensation plan under the Internal Revenue Code. It is the intention of the
Company that the amounts by which Directors elect to have their compensation
reduced pursuant to this Plan shall not be included in the gross income of the
Directors or their beneficiaries until such time as the amounts credited to
Directors’ Deferred Compensation Accounts hereunder are distributed from the
Plan. If, at any time, it is determined by the Company that amounts attributable
to Directors’ compensation reduction elections or Deferred Compensation Accounts
are includible in the gross income of the Directors or their beneficiaries
before distribution pursuant to Article V hereof, all amounts credited to
Directors’ Deferred Compensation Accounts shall be immediately distributed to
the respective Directors or, in the case of deceased Directors, their
beneficiaries. Distributions described in the preceding sentence shall be made
from the Trust if the Company is not Insolvent at the time for such
distribution.

8.5. Governing Law. This Plan shall be governed by and construed in accordance
with the internal substantive laws of the State of Ohio.

8.6. Successors. The provisions of this Plan shall bind and inure to the benefit
of the Company and its successors and assigns. The term “successors” as used
herein shall include any corporate or other business entity which shall, whether
by merger, consolidation, purchase or otherwise, acquire all or substantially
all of the business and assets of the Company and successors of any such
corporation or other business entity.

8.7. No Right to Continued Service. Nothing contained herein shall be construed
to confer upon any Director the right to continue to serve as a Director of the
Company or in any other capacity.

IN WITNESS WHEREOF, Brush Engineered Materials, Inc. has executed this Plan this
7th day of December, 2004.

BRUSH ENGINEERED MATERIALS INC.

By: /s/ Michael C. Hasychak   

      Name: Michael C. Hasychak
Title: Vice President, Treasurer and Secretary