Document:

EX-10.1

Exhibit 10.1

BRUSH ENGINEERED MATERIALS INC.

2006 STOCK INCENTIVE PLAN

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TABLE OF CONTENTS

  Page 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	1.
	 	Purpose
	 	 	 	 	 		1	
	2.
	 	Definitions
	 	 	 	 	 		1	
	3.
	 	Shares Subject to this Plan
	 	 	 	 	 		4	
	4.
	 	Performance Restricted Shares
	 	 	 	 	 		5	
	5.
	 	Performance Shares and Performance Units
	 	 	 	 	 		5	
	6.
	 	Restricted Shares
	 	 	 	 	 		6	
	7.
	 	Option Rights
	 	 	 	 	 		7	
	8.
	 	Appreciation Rights
	 	 	 	 	 		8	
	9.
	 	Restricted Stock Units
	 	 	 	 	 		9	
	10.
	 	Administration of the Plan
	 	 	 	 	 		10	
	11.
	 	Adjustments
	 	 	 	 	 		10	
	12.
	 	Detrimental Activity
	 	 	 	 	 		11	
	13.
	 	Participation by Employees of Designated Subsidiaries
	 	 	 	 	 		11	
	14.
	 	Non-U.S. Employees
	 	 	 	 	 		11	
	15.
	 	Transferability
	 	 	 	 	 		12	
	16.
	 	Withholding Taxes
	 	 	 	 	 		12	
	17.
	 	Compliance with Section 409A of the Code
	 	 	 	 	 		12	
	18.
	 	Effective Date
	 	 	 	 	 		13	
	19.
	 	Amendments
	 	 	 	 	 		13	
	20.
	 	Termination of the Plan
	 	 	 	 	 		14	
	21.
	 	Governing Law
	 	 	 	 	 		14	
	22.
	 	Miscellaneous Provisions
	 	 	 	 	 		14	
	 
	 	 	 	 	 		i		 	 	 	 

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BRUSH ENGINEERED MATERIALS INC.

2006 STOCK INCENTIVE PLAN

1. Purpose. The purpose of this Plan is to attract and retain officers, other key employees and
consultants of Brush Engineered Materials

Inc. (the “Corporation”) and its Subsidiaries and to provide such persons with incentives and
rewards for superior performance and to promote

equity participation by the officers, key employees and consultants of the Corporation, and
thereby reinforcing a mutuality of interest with

other shareholders, and permitting officers, key employees and consultants to share in the
Corporation’s growth.

2. Definitions. As used in this Plan,

“Appreciation Right” means a right granted pursuant to Section 8 of this Plan, including a
Free-standing Appreciation Right and a

Tandem Appreciation Right.

“Base Price” means the price to be used as the basis for determining the Spread upon the
exercise of a Free-standing Appreciation Right.

“Board” means the Board of Directors of the Corporation.

A “Change in Control” of the Corporation shall have the meaning determined by the Committee from
time to time.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Committee” means the committee described in Section 10(a) of this Plan.

“Common Shares” means (i) Common Shares without par value of the Corporation and (ii) any
security into which Common Shares may

be converted by reason of any transaction or event of the type referred to in Section 11 of this
Plan.

“Covered Employee” means a Participant who is, or is determined by the Committee to be likely to
become, a “covered employee” within

the meaning of Section 162(m) of the Code (or any successor provision).

“Date of Grant” means the date specified by the Committee on which a grant of Performance
Restricted Shares, Performance Shares or Performance Units, Option Rights, Appreciation Rights or
a grant or sale of Restricted Shares or Restricted Stock Units shall become effective, which shall
not be earlier than the date on which the Committee takes action with respect thereto.

“Designated Subsidiary” means a subsidiary that is (i) not a corporation or (ii) a
corporation in which at the time the Corporation owns or controls, directly or indirectly, less
than 80 percent of the total combined voting power represented by all classes of stock issued by
such corporation.

“Evidence of Award” means an agreement, certificate, resolution or other type or form of
writing or other evidence approved by the Committee which sets forth the terms and conditions of
the award granted. An Evidence of Award may be in any electronic medium, may be limited to a
notation on the books and records of the Corporation and, with the approval of the Committee, need
not be signed by a representative of the Corporation or a Participant.

“Free-standing Appreciation Right” means an Appreciation Right granted pursuant to Section 8
of this Plan that is not granted in tandem with an Option Right.

“Incentive Stock Option” means an Option Right that is intended to qualify as an “incentive
stock option” under Section 422 of the Code

or any successor provision thereto.

“Management Objectives” means the measurable performance objective or objectives established
pursuant to this Plan for Participants who have received grants of Performance Restricted Shares,
Performance Shares or Performance Units or, when so determined by the

Committee, Option Rights, Appreciation Rights, Restricted Stock Units or dividend credits.
Management Objectives may be described in terms

of Corporation-

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wide objectives or objectives that are related to the performance of the individual Participant or
of the Subsidiary, division, department, region

or function within the Corporation or Subsidiary in which the Participant is employed. The
Management Objectives may be relative to the

performance of other companies. The Management Objectives applicable to any award to a
Participant who is, or is determined by the Committee to be likely, to become, a Covered
Employee shall be limited to specified levels of or growth in one or more of the following
criteria:

(i) Profits (e.g., operating income, EBIT, EBT, net income, earnings per share,
residual or economic earnings — these profitability metrics could be measured before
special items and/or subject to GAAP definition);

(ii) Cash Flow (e.g., EBITDA, operating cash flow, total cash flow, free cash flow,
residual cash flow or cash flow return on investment);

(iii) Returns (e.g., profits or cash flow returns on: assets, invested capital, net
capital employed, and equity);

(iv) Working Capital (e.g., working capital divided by sales, days’ sales
outstanding, days’ sales inventory, and days’ sales in payables, or any combination
thereof);

(v) Profit Margins (e.g., profits divided by revenues, gross margins and material
margins divided by revenues, and variable margin divided by sales);

(vi) Liquidity Measures (e.g., debt-to -capital, debt-to -EBITDA, total debt ratio,
EBITDA multiple);

(vii) Sales Growth, Cost Initiative and Stock Price Metrics (e.g., revenues, revenue
growth, new product sales growth, growth

in value added sales, stock price appreciation, total return to shareholders, sales and
administrative costs divided by sales, sales per

employee); and

(viii) Strategic Initiative Key Deliverable Metrics consisting of one or more of the
following: product development, strategic partnering, research and development, market
penetration, geographic business expansion goals, cost targets, customer satisfaction,
employee satisfaction, management of employment practices and employee benefits, supervision
of litigation and information technology, increase in yield and productivity and goals
relating to acquisitions or divestitures of subsidiaries, affiliates and joint ventures.

If the Committee determines that a change in the business, operations, corporate structure or
capital structure of the Corporation, or the manner

in which it conducts its business, or other events or circumstances render the Management
Objectives unsuitable, the Committee may in its

discretion modify such Management Objectives or the related minimum acceptable level of
achievement, in whole or in part, as the Committee deems appropriate and equitable, except in the
case of a Covered Employee where such action would result in the loss of the otherwise

available exemption of the award under Section 162(m) of the Code. In such case, the Committee
will not make any modification of the

Management Objectives or minimum acceptable level of achievement with respect to such Covered
Employee.

“Market Value per Share” means, as of any particular date, the fair market value of the Common
Shares as determined by the Committee.

“Nonqualified Option” means an Option Right that is not intended to, qualify as a Tax-qualified
Option.

“Optionee” means the person so designated in an Evidence of Award evidencing an outstanding
Option Right.

“Option Price” means the purchase price payable upon the exercise of an Option Right.

“Option Right” means the right to purchase Common Shares from the Corporation upon the
exercise of a Nonqualified Option or a Tax- qualified Option granted pursuant to Section 7 of
this Plan.

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“Participant” means a person who is selected by the Committee to receive benefits under this
Plan and (i) is at that time an officer,

including without limitation an officer who may also be a member of the Board, or other salaried
employee or consultant of the Corporation or

a Subsidiary or (ii) has agreed to commence serving in any of such capacities, within 90 days of
the Date of Grant. The term “Participant” shall also include any person who provides services to
the Corporation or a Subsidiary that are equivalent to those typically provided by an

employee.

“Performance Period” means, in respect of a Performance Share or Performance Unit, a period of
time established pursuant to Section 5

of this Plan within, which, the Management Objective relating thereto is to be achieved.

“Performance Restricted Shares” means Common Shares granted pursuant to Section 4 of this
Plan as to which neither substantial risk of forfeiture nor the restrictions on transfer referred
to in such Section 4 has expired.

“Performance Share” means a bookkeeping entry that records the equivalent of one Common Share
and is awarded pursuant to Section 5

of this Plan.

“Performance Unit” means a bookkeeping entry that records a unit equivalent to the Market Value
per Share of one Common Share on

the Date of Grant and is awarded pursuant to Section 5 of this Plan.

“Plan” means the Brush Engineered Materials Inc. 2006 Stock Incentive Plan, as may be amended
from time to time.

“Restricted Shares” means Common Shares granted or sold pursuant to Section 6 of this Plan as
to which neither the substantial risk of forfeiture nor the restrictions on transfer referred to
in such Section 6 has expired. Restricted Shares are not subject to Management Objectives
specified by the Committee.

“Restriction Period” means the period of time during which Restricted Stock Units are subject to
restrictions under Section 9 of this Plan.

“Restricted Stock Units” means an award pursuant to Section 9 of this Plan of the right
to receive Common Shares at the end of a specified Restriction Period.

“Spread” means, in the case of a Free-standing Appreciation Right, the amount by which the
Market Value per Share on the date when any such right is exercised exceeds the Base Price
specified in such right or, in the case of a Tandem Appreciation Right, the amount by which the
Market Value per Share on the date when any such right is exercised exceeds the Option Price
specified in the related Option Right.

“Subsidiary” means a corporation, company or other entity (i) at least 50 percent of whose
outstanding shares or securities (representing

the right to vote for the election of directors or other managing authority) are, or (ii) which
does not have outstanding shares or securities (as

may be the case in a partnership, joint venture or unincorporated association), but at least 50
percent of whose ownership interest representing

the right generally to make decisions for such other entity is, now or hereafter, owned or
controlled, directly or indirectly, by the Corporation

except that for purposes of determining whether any person may be a Participant for purposes of
any grant of Incentive Stock Options,

“Subsidiary” means any corporation in which at the time the Corporation owns or controls, directly
or indirectly, at least 50 percent of the total combined voting power represented by all classes
of stock issued by such corporation.

“Tandem Appreciation Right” means an Appreciation Right granted pursuant to Section 8 of this
Plan that is granted in tandem with an

Option Right.

“Tax-qualified Option” means an Option Right that is intended to qualify under particular
provisions of the Code, including without limitation an Incentive Stock Option.

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3. Shares Subject to this Plan.

(a) Maximum Shares Available Under Plan.

(i) Subject to adjustment as provided in Section 11 of this Plan, the number of Common
Shares that may be issued or transferred

(A) upon the exercise of Option Rights or Appreciation Rights, (B) as Restricted Shares or
Performance Restricted Shares and released

from substantial risks of forfeiture thereof, (C) in payment of Restricted Stock Units, (D)
in payment of Performance Shares or

Performance Units that have been earned, or (E) in payment of dividend equivalents paid with

respect to awards made under this Plan will not exceed in the aggregate 1,250,000 Common

Shares, plus any Common Shares relating to awards that expire or are forfeited or

are cancelled under this Plan. Such shares may be shares of original issuance or treasury
 shares or a combination of the foregoing.

(ii) Common Shares covered by an award granted under this Plan shall not be counted as
used unless and until they are actually

issued and delivered to a Participant. Without limiting the generality of the foregoing, upon
payment in cash of the benefit provided by

any award granted under this Plan, any Common Shares that were covered by that award will be
available for issue or transfer

hereunder. Notwithstanding anything to the contrary contained herein: (A) Common Shares
tendered in payment of the Option Price of

a Option Right shall not be added to the aggregate plan limit described above; (B) Common
Shares withheld by the Corporation to

satisfy the tax withholding obligation shall not be added to the aggregate plan limit
described above; (C) Common Shares that are repurchased by the Corporation with Option Right
proceeds shall not be added to the aggregate plan limit described above; and (D) all Common
Shares covered by an Appreciation Right, to the extent that it is exercised and settled in
Common Shares, whether or not all Common Shares covered by the award are actually issued to
the Participant upon exercise of the right, shall be considered issued or transferred
pursuant to this Plan.

(b) Life-of -Plan Limits. Notwithstanding anything in this
Section 3, or elsewhere in this Plan, to the contrary and subject to adjustment pursuant
to Section 10 of this Plan:

(i) The aggregate number of Common Shares actually issued or transferred by the
Corporation upon the exercise of Incentive Stock

Options shall not exceed 1,250,000.

(ii) The aggregate number of Common Shares issued as or in payment of, as the case may
be, Performance Restricted Shares, Performance Shares, Performance Units, Restricted Shares
(and released from substantial risk of forfeiture) or Restricted Stock Units shall not in the
aggregate exceed 850,000.

(c) Individual Participant Limits. Notwithstanding anything in this Section 3, or
elsewhere in this Plan, to the contrary and subject to adjustment pursuant to Section 10 of
this Plan:

(i) No Participant shall be granted, Restricted Stock Units that specify Management
Objectives, Performance Restricted Shares, Performance Shares, in the aggregate, for more
than 50,000 Common Shares during any calendar year.

(ii) Notwithstanding any other provision of this Plan to the contrary, in no event shall
any Participant in any calendar year receive

an award of Performance Units having an aggregate maximum value as of their respective Dates
of Grant in excess of $1,000,000.

(iii) No Participant shall be granted Option Rights or Appreciation Rights, in the
aggregate, for more than 100,000 Common

Shares during any calendar year.

(d) Exclusion from Certain Restrictions. Notwithstanding anything in this Plan to
the contrary, up to 5% of the maximum number of Common Shares provided for in Section 3(a)(i)
above may be used for awards granted under Sections 4 through 10 of this Plan that do not comply
with the three-year requirements set forth in Sections 6(c) and 9(c) of this Plan and the
one-year requirements of Sections 4(b), 5

(b) and 9(b) of this Plan.

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4. Performance Restricted Shares. The Committee may from time to time and upon such
terms and conditions as it may determine, authorize grants to Participants of Performance
Restricted Shares. Each such grant may utilize any or all of the authorizations, and will be
subject to all of the requirements contained in the following provisions:

(a) Each grant shall constitute an immediate transfer of the ownership of Common Shares
to the Participant in consideration of the performance of services, entitling such Participant
to dividend, voting and other ownership rights, subject to the substantial risk of forfeiture
and restrictions on transfer hereinafter referred to.

(b) Any grant of Performance Restricted Shares shall specify Management Objectives which,
if achieved, will result in termination or early termination of the restrictions applicable to
such Shares and each grant shall specify in respect of the specified Management Objectives, a
minimum acceptable level of achievement and shall set forth a formula for determining the number
of Performance

Restricted Shares on which restrictions will terminate if performance is at or above the minimum
level, but falls short of full achievement

of the specified Management Objectives; provided, however, that no such termination shall occur
less than one year after the Date of

Grant, except in the event of retirement, death or disability of the Participant or a
Change in Control of the Corporation or similar transaction or event.

(c) Each grant may be made without payment of additional consideration from the Participant.

(d) Each grant shall provide that the Performance Restricted Shares covered thereby shall be
subject to a “substantial risk of forfeiture”

within the meaning of Section 83 of the Code for a period to be determined by the Committee on
the Date of Grant, and any grant may provide for the earlier termination of such period in the
event of retirement, death or disability of the Participant or a Change in Control of

the Corporation or other similar transaction or event.

(e) Each grant shall provide that, during the period for which such substantial risk of
forfeiture is to continue, the transferability of the Performance Restricted Shares shall be
prohibited or restricted in the manner and to the extent prescribed by the Committee on the
Date of Grant. Such restrictions may include without limitation rights of repurchase or first
refusal in the Corporation or provisions subjecting the Performance Restricted Shares to a
continuing substantial risk of forfeiture in the hands of any transferee.

(f) Any grant may require that any or all dividends or other, distributions paid on the
Performance Restricted Shares during the period

of such restrictions be automatically sequestered. Such distribution may be reinvested on an
immediate or deferred basis in additional Common Shares, which may be subject to the same
restrictions as the underlying award or such other restrictions as the Committee may determine.

(g) Each grant of Performance Restricted Shares shall be evidenced by an Evidence of Award,
which shall contain such terms and provisions as the Committee may determine consistent with
this Plan. Unless otherwise directed by the Committee, all certificates representing Performance
Restricted Shares, together with a stock power that shall be endorsed in blank by the
Participant with respect to

the Performance Restricted Shares, shall be held in custody by the Corporation until all
restrictions thereon lapse.

5. Performance Shares and Performance Units. The Committee may also authorize grants of
Performance Shares and Performance

Units that shall become payable to the Participant upon the achievement of specified Management
Objectives during the Performance Period.

Each such grant may utilize any or all of the authorizations, and will be subject to all of the
requirements contained in the following provisions:

(a) Each grant shall specify the number of Performance Shares or Performance Units to
which it pertains, which may be subject to adjustment to reflect changes in compensation or
other factors, provided, however, that no such adjustment will be made in the case of a Covered
Employee where such

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action would result in the loss of the otherwise available exemption of the award under Section
162(m) of the Code.

(b) The Performance Period with respect to each Performance Share or Performance Unit will
be such period of time (not less than one year), commencing with the Date of Grant as shall be
determined by the Committee on the Date of Grant and may be subject to earlier termination or
other modification in the event of retirement, death or disability of the Participant or a
Change in Control of the Corporation

or similar transaction or event.

(c) Each grant shall specify the Management Objectives that are to be achieved by the
Participant and each grant shall specify in

respect of the specified Management Objectives a minimum acceptable level of achievement below
which no payment will be made and shall set forth a formula for determining the amount of any
payment to be made if performance is at or above the minimum acceptable

level, but falls short of full achievement of the specified Management Objective. The grant of
Performance Shares or Performance Units

shall specify that, before the Performance Shares or Performance Units will be earned and paid,
the Committee must certify that the

Management Objectives have been satisfied.

(d) Each grant shall specify the time and manner of payment of Performance Shares or
Performance Units that shall have been earned,

and any grant may specify that any such amount may be paid by the Corporation in cash, Common
Shares or any combination thereof and may either grant to the Participant or reserve to the
Committee the right to elect among those alternatives.

(e) Any grant of Performance Shares may specify that the amount payable with respect thereto
may not exceed a maximum specified

by the Committee at the Date of Grant. Any grant of Performance Units may specify that the
amount payable or the number of Common

Shares issued with respect thereto may not exceed maximums specified by the Committee at the
Date of Grant.

(f) The Committee may at the Date of Grant of Performance Shares, provide for the
payment of dividend equivalents to the holder thereof on either a current, deferred or
contingent basis, either in cash or in additional Common Shares.

(g) Each grant of Performance Shares or Performance Units shall be evidenced by an
Evidence of Award, which shall contain such terms and provisions as the Committee may
determine consistent with this Plan.

6. Restricted Shares. The Committee may also authorize the grant or sale to Participants of
Restricted Shares. Each such grant may utilize any or all of the authorizations, and will be
subject to all of the requirements contained in the following provisions:

(a) Each grant shall, constitute an immediate transfer of the ownership of Common Shares to
the Participant in consideration of the performance of services entitling such Participant to
dividend, voting and other ownership rights, subject to the substantial risk of forfeiture

and restrictions on transfer hereinafter referred to.

(b) Each grant or sale may be made without payment of additional consideration or in
consideration of a payment by such Participant that is less than the Market Value per Share at
the Date of Grant.

(c) Each grant or sale shall provide that the Restricted Shares covered thereby shall be
subject to a “substantial risk of forfeiture” within

the meaning of Section 83 of the Code for a period of at least three years to be determined by
the Committee on the Date of Grant, and any

grant may provide for the earlier termination of such period in the event of retirement, death
or disability of the Participant or a Change in

Control of the Corporation or similar transaction or event.

(d) Each grant or sale shall provide that, during the period for which such substantial risk
of forfeiture is to continue, the transferability

of the Restricted Shares shall be prohibited or restricted in the manner and to the extent
prescribed by the Committee on the Date of Grant. Such restrictions may include, without
limitation, rights of repurchase or first refusal in the Corporation or provisions

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subjecting the Restricted Shares to a continuing substantial risk of forfeiture in the hands of
any transferee.

(e) Any grant or sale may require that any or all dividends or other distributions paid on
the Restricted Shares during the period of such restrictions be automatically sequestered. Such
distribution may be reinvested on an immediate or deferred basis in additional, Common Shares,
which may be subject to the same restrictions as the underlying award or such other restrictions
as the Committee may determine.

(f) Each grant of Restricted Shares shall be evidenced by an Evidence of Award, which
shall contain such terms and provisions as the Committee may determine consistent with this
Plan. Unless otherwise directed by the Committee, all certificates representing Restricted
Shares, together with a stock power that shall be endorsed in blank by the Participant with
respect to the Restricted Shares, shall be held in custody by the Corporation until all
restrictions thereon lapse.

7. Option Rights. The Committee may from time to time authorize grants to Participants of
options to purchase Common Shares. Each such grant may utilize any or all of the authorizations,
and will be subject to all of the requirements contained in the following provisions:

(a) Each grant of Option Rights shall specify the number of Common Shares to which it
pertains.

(b) Each grant shall specify an Option Price per Common Share, which shall be equal to or
greater than the Market Value per Share on

the Date of Grant.

(c) Each grant shall specify the form of consideration to be paid in satisfaction of the
Option Price and the manner of payment of such consideration, which may include (i) cash in the
form of currency or check or other cash equivalent acceptable to the Corporation,

(ii) nonforfeitable, unrestricted Common Shares, which are already owned by the Optionee and
having a value at the time of exercise that

is equal to the Option Price, (iii) any other legal consideration that the Committee may deem
appropriate, including without limitation any

form of consideration authorized under Section 7(d) below, on such basis as the Committee may
determine in accordance with this Plan and (iv) any combination of the foregoing.

(d) Any grant of a Nonqualified Option may provide that payment of the Option Price may also
be made in whole or in part in the form

of Restricted Shares or other Common Shares that are subject to risk of forfeiture or
restrictions on transfer. Unless otherwise determined

by the Committee on or after the Date of Grant, whenever any Option Price is paid in whole or
in part by means of any of the forms of consideration specified in this Section 7(d), the
Common Shares received by the Optionee upon the exercise of the Nonqualified Option

shall be subject to the same, risks of forfeiture or restrictions on transfer as those that
applied, to the consideration surrendered by the Optionee; provided, however, that such risks
of forfeiture and restrictions on transfer shall, apply only to the same number of Common
Shares received by the Optionee as applied to the forfeitable or restricted Common Shares
surrendered by the Optionee.

(e) To the extent permitted by law, any grant may provide for deferred payment of the
Option Price from the proceeds of sale through a broker of some or, all of the Common Shares to
which the exercise relates.

(f) Successive grants may be made to the same Optionee regardless of whether any Option
Rights previously granted to the Optionee remain unexercised.

(g) Each grant shall specify the period or periods of continuous employment of the Optionee
by the Corporation or any Subsidiary that

are necessary before the Option Rights or installments thereof shall become exercisable, and any
grant may provide for the earlier exercise

of the Option Rights in the event of retirement, death or disability of the Participant or a
Change in Control of the Corporation or similar

transaction or event.

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(h) Any grant of Option Rights may specify Management Objectives which, if achieved, will
result in exercisability of such rights.

(i) Option Rights granted under this Plan may be (i) options that are intended to qualify
under particular provisions of the Code,

including without limitation Incentive Stock Options, (ii) options that are not intended to so
qualify or (iii) combinations of the foregoing. Incentive Stock Options may be granted only to
Participants who, on the date of the grant, are officers or other key employees of the

Corporation or any Subsidiary who must meet the definition of “employees” under Section 3401(c)
of the Code.

(j) The Committee may at the Date of Grant of any Option Rights (other than Incentive
Stock Options), provide for the payment of dividend equivalents to the Optionee on either a
current or deferred or contingent basis, either in cash or in additional Common Shares.

(k) The exercise of an Option Right will result in the cancellation on a
share-for-share basis of any Tandem Appreciation Right authorized under Section 8 of this
Plan.

(l) No Option Right granted pursuant to this Section 7 may be exercised more than 10
years from the Date of Grant. Subject to this limit, the Committee may cause Option Rights
to continue to be exercisable after termination of employment of the Participant under
circumstances specified by the Committee.

(m) The Committee reserves the discretion after the Date of Grant to provide for (i) the
payment of a cash bonus at the time of exercise;

(ii) the availability of a loan at exercise; or (iii) the right to tender in satisfaction of the
Option Price nonforfeitable, unrestricted Common

Shares, which are already owned by the Optionee and have a value at the time of exercise that is
equal to the exercise price.

(n) The Committee may substitute, without receiving Participant permission, Appreciation
Rights payable only in Common Shares (or

Appreciation Rights payable in cash, Common Shares, or in any combination thereof as elected by
the Committee) for outstanding

Options; provided, however, that the terms of the substituted Appreciation Rights are
substantially the same as the terms for the Options

and the difference between the Market Value per Share of the underlying Common Shares and the
Base Price of the Appreciation Rights is

equivalent to the difference between the Market Value Share of the underlying Common Shares and
the Option Price of the Options. If, in

the opinion of the Corporation’s auditors, this provision creates adverse accounting
consequences for the Corporation, it shall be considered null and void.

(o) Each grant of Option Rights shall be evidenced by an Evidence of Award, which shall
contain such terms and provisions as the

Committee may determine consistent with this Plan.

8. Appreciation Rights. The Committee may also authorize grants to Participants of Appreciation
Rights. An Appreciation Right shall be

a right of the Participant to receive from the Corporation an amount, which shall be determined
by the Committee and shall be expressed as a percentage (not exceeding 100 percent) of the
Spread at the time of the exercise of such right. An Appreciation Right awarded in relation to
an Incentive Stock Option must be granted concurrently with such Incentive Stock Option. Each
such grant may utilize any or all of the

authorizations, and will be subject to all of the requirements contained in the following
provisions:

(a) Any grant may specify that the amount payable upon the exercise of an Appreciation
Right may be paid by the Corporation in cash, Common Shares or any combination thereof and may
either grant to the Participant or reserve to the Committee the right to elect among

those alternatives.

(b) Any grant may specify that the amount payable upon the exercise of an Appreciation Right
shall not exceed a maximum specified

by the Committee on the Date of Grant.

(c) Any grant may specify (i) a waiting period or periods before Appreciation Rights
shall become exercisable and (ii) permissible dates or periods on or during which
Appreciation Rights shall be exercisable.

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(d) Any grant may specify that an Appreciation Right may be exercised only in the event of
retirement, death or disability of the

Participant or a Change in Control of the Corporation or similar transaction or event.

(e) Any grant of Appreciation Rights may specify Management Objectives that must be
achieved as a condition of the exercise of such rights.

(f) Any grant may provide for the payment to the Participant of dividend equivalents
thereon in cash or Common Shares on a current, deferred or contingent basis.

(g) Each grant shall be evidenced by an Evidence of Award, which shall describe the subject
Appreciation Rights, identify any related Option Rights, state that the Appreciation Rights are
subject to all of the terms and conditions of this Plan and contain such other terms and
provisions as the Committee may determine consistent with this Plan.

(h) Regarding Tandem Appreciation Rights only: Each grant shall provide that a Tandem
Appreciation Right may be exercised only

(i) at a time when the related Option Right (or any similar right granted under any other plan
of the Corporation) is also exercisable and the

Spread is positive and (ii) by surrender of the related Option Right (or such other right) for
cancellation.

(i) Regarding Free-standing Appreciation Rights only:

(i) Each grant shall specify in respect of each Free-standing Appreciation Right a
Base Price per Common Share, which shall be equal to or greater than the Market Value per
Share on the Date of Grant;

(ii) Successive grants may be made to the same Participant regardless of whether any
Free-standing Appreciation Rights previously granted to such Participant remain unexercised;

(iii) Each grant shall specify the period or periods of continuous employment of the
Participant by the Corporation or any

Subsidiary that are necessary before the Free-standing Appreciation Rights or installments
thereof shall become exercisable, and any grant may provide for the earlier exercise of such
rights in the event of retirement, death or disability of the Participant or a Change in

Control of the Corporation or similar transaction or event; and

(iv) No Free-standing Appreciation Right granted under this Plan may be exercised more
than 10 years from the Date of Grant.

9. Restricted Stock Units. The Committee may also authorize grants or sales of Restricted
Stock Units to Participants. Each such grant may utilize any or all of the authorizations, and
will be subject to all of the requirements contained in the following provisions:

(a) Each grant or sale shall constitute the agreement by the Corporation to deliver Common
Shares or cash to the Participant in the future in consideration of the performance of
services, subject to the fulfillment during the Restriction Period of such conditions (which
may include the achievement of Management Objectives) as the Committee may specify.

(b) If a grant of Restricted Stock Units specifies that the Restriction Period will
terminate upon the achievement of Management Objectives, such Restriction Period may not
terminate sooner than one year from the Date of Grant. Each grant may specify in respect of
such Management Objectives a minimum acceptable level of achievement and may set forth a
formula for determining the number of

Restricted Stock Units which restriction will terminate if performance is at or above the
minimum level, but falls short of full achievement

of the specified Management Objectives.

(c) Each grant or sale may be made without additional consideration from the Participant or
in consideration of a payment by the

Participant that is less than the Market Value per Share on the Date of Grant.

(d) If the Restriction Period lapses only by the passage of time, each grant or sale shall
provide that the Restricted Stock Units covered thereby shall be subject to a Restriction Period
of at least three

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years, which shall be fixed by the Committee on the Date of Grant, and any grant or sale may
provide for the earlier termination of such

period in the event of retirement, death or disability of the Participant or a Change in
Control of the Corporation or similar transaction or event.

(e) During the Restriction Period, the Participant shall not have any right to transfer any
rights under the subject award, shall not have

any rights of ownership in the Restricted Stock Units and shall not have any right to vote such
 shares, but the Committee may on or after

the Date of Grant authorize the payment of dividend equivalents on such Restricted Stock Units
in cash or in additional Common Shares

on a current, deferred or contingent basis.

(f) Each grant or sale will specify the time and manner of payment of Restricted Stock
Units that have been earned. Any grant or sale may specify that the amount payable with respect
thereto may be paid by the Corporation in cash, in Common Shares or in any

combination thereof and may either grant to the Participant or retain in the Committee the right
to elect among those alternatives.

(g) Each grant or sale shall be evidenced by an Evidence of Award, which shall contain
such terms and provisions as the Committee may determine consistent with this Plan.

10. Administration of the Plan.

(a) This Plan shall be administered by the Organization and Compensation Committee of the
Board. A majority of the Committee shall constitute a quorum, and the acts of the members of
the Committee who are present at any meeting thereof at which a quorum is present, or acts
unanimously approved by the members of the Committee in writing, shall be the acts of the
Committee.

(b) The interpretation and construction by the Committee of any provision of this Plan or
any agreement, notification or document evidencing the grant of Option Rights, Restricted
Shares, Performance Restricted Shares, Performance Shares or Performance Units, Appreciation
Rights or Restricted Stock Units and any determination by the Committee pursuant to any
provision of this Plan or any such agreement, notification or document, shall be final and
conclusive. No member of the Committee shall be liable for any such action taken

or determination made in good faith.

(c) The Committee may delegate to the appropriate officer or officers of the Corporation
or any Subsidiary, part or all of its authority with respect to the administration of awards
made by the Committee to individuals who are not officers or directors of the Corporation
within the meaning of the Securities Exchange Act of 1934.

(d) To the extent permitted by Ohio law, the Committee may, from time to time, delegate to
one or more officers of the Corporation the authority of the Committee to grant and determine
the terms and conditions of awards granted under this Plan. In no event shall any such
delegation of authority be permitted with respect to awards to any executive officer or any
person subject to Section 162(m) of the Code.

11. Adjustments. The Committee may make or provide for such adjustments in the (a) number of
Common Shares covered by outstanding

Option Rights, Appreciation Rights, Restricted Stock Units and Performance Shares and Performance
Units granted hereunder, (b) prices per share applicable to such Option Rights and Appreciation
Rights, and (c) kind of shares (including shares of another issuer) covered thereby, as

the Committee in its sole discretion may in good faith determine to be equitably required in
order to prevent dilution or enlargement of the rights of Participants that otherwise would
result from (x) any stock dividend, stock split, combination of shares, recapitalization or
other

change in the capital structure of the Corporation, (y) any merger, consolidation, spin-off,
spin-out, split-off, split-up, reorganization, partial or complete liquidation or other
distribution of assets, issuance of rights or warrants to purchase securities or (z) any other
corporate transaction or event having an effect similar to any of the foregoing. In the event of
any such transaction or event, the Committee may provide in substitution

for any or all outstanding awards under this Plan such alternative consideration as it may in good
faith determine to be equitable under the circumstances and may require in connection therewith
the surrender of all awards so replaced. Moreover, the Committee may on or after the Date of Grant
provide in the agreement evidencing any award under this Plan

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12

that the holder of the award may elect to receive an equivalent award in respect of securities of
the surviving entity of any merger,

consolidation or other transaction or event having a similar effect, or the Committee may provide
that the holder will automatically be entitled

to receive such an equivalent award. The committee may also make or provide for such adjustments
in the numbers and kind of shares specified

in Section 3 of this 2006 Plan as the Committee in its sole discretion, exercised in good faith,
may determine is appropriate to reflect any transaction or event described in this Section 11;
provided, however, that any such adjustment to the number specified in Section 3(b)(i) will be
made only if and to the extent that such adjustment would not cause any option intended to qualify
as an Incentive Stock Option to fail so to

qualify. This Section 11 shall not be construed to permit the re-pricing of any Option Rights
in the absence of any of the circumstances described above in contravention of Section 19(b)
hereof.

12. Detrimental Activity. Any Evidence of Award may provide that if a Participant, either
during employment by the Corporation or a Subsidiary or within a specified period after
termination of such employment, shall engage in any Detrimental Activity (as defined by the
Committee in the Evidence of Award), and the Board shall so find, forthwith upon notice of such
finding, the Participant shall:

(a) Forfeit any award granted under this Plan then held by the Participant;

(b) Return to the Corporation, in exchange for payment by the Corporation of any amount
actually paid therefor by the Participant, all

Common Shares that the Participant has not disposed of that were offered pursuant to this Plan
within a specified period prior to the date of

the commencement of such Detrimental Activity; and

(c) With respect to any Common Shares so acquired that the Participant has disposed of,
pay to the Corporation in cash the difference between:

(i) Any amount actually paid therefor by the Participant pursuant to this Plan, and

(ii) The Market Value per Share of the Common Shares on the date of such acquisition.

To the extent that such amounts are not paid to the Corporation, the Corporation may set off the
amounts so payable to it against any amounts that may be owing from time to time by the
Corporation or a Subsidiary to the Participant, whether as wages, deferred compensation or

vacation pay or in the form of any other benefit or for any other reason.

13. Participation by Employees of Designated Subsidiaries. As a condition to the effectiveness
of any grant or award to be made

hereunder to a Participant who is an employee of a Designated Subsidiary, whether or not such
Participant is also employed by the Corporation

or another Subsidiary, the Board may require such Designated Subsidiary to agree to transfer to
such employee (when, as and if provided for

under this Plan, and any applicable Agreement entered into with any such employee pursuant to this
Plan) the Common Shares that would otherwise be delivered by the Corporation, upon receipt by such
Designated Subsidiary of any consideration then otherwise payable by such Participant to the
Corporation. Any such award shall be evidenced by an agreement between the Participant and the
Designated Subsidiary, in

lieu of the Corporation, on terms consistent with this Plan and approved by the Board and such
Designated Subsidiary. All such Common

Shares so delivered by or to a Designated Subsidiary shall be treated as if they had been
delivered by or to the Corporation for purposes of Section 3 of this Plan, and all references
to the Corporation in this Plan shall be deemed to refer to such Designated Subsidiary,
except for purposes of the definition of “Board” and except in other cases where the context
otherwise requires.

14. Non-U.S. Employees. In order to facilitate the making of any grant or combination of
grants under this Plan, the Committee may

provide for such special terms for awards to Participants who are foreign nationals or who are
employed by the Corporation or any Subsidiary

or Designated Subsidiary outside of the United States of America or who provide services to the
Corporation under an agreement with a foreign nation or agency, as the Committee may consider
necessary or appropriate to accommodate differences in local law; tax policy or

custom. Moreover, the Committee may approve such supplements to or amendments, restatements or
alternative versions of this Plan

(including, without limitation, sub-plans) as it may consider necessary or appropriate for such
purposes, without thereby affecting the terms of this Plan as in effect for

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13

any other purpose, and the Secretary or other appropriate officer of the Corporation may certify
any such document as having been approved

and adopted in the same manner as this Plan. No such special terms, supplements, amendments or
restatements, however, shall include any

provisions that are inconsistent with the terms of this Plan as then in effect unless this
Plan could have been amended to eliminate such inconsistency without further approval by the
shareholders of the Corporation.

15. Transferability. (a) Except as provided in Section 15(c) below, no Option Right or
Appreciation Right or other derivative security granted under this Plan may be transferred by a
Participant except by will or the laws of descent and distribution. Except as otherwise
determined by the Committee, Option Rights and Appreciation Rights granted under this Plan may
not be exercised during a Participant’s lifetime except by the Participant or, in the event of
the Participant’s legal incapacity, by his guardian or legal representative acting in a
fiduciary capacity on behalf of the Participant under state law and court supervision.

(b) The Committee may specify at the Date of Grant, that all or any part of the Common Shares
that are (i) to be issued or transferred by the Corporation upon the exercise of Option Rights or
Appreciation Rights, or in payment of Performance Shares or Performance Unit or upon the
termination of the Restriction Period applicable to Restricted Stock Units, or (ii) no longer
subject to the substantial risk of forfeiture and restrictions on transfer referred to in Sections
46 and 6 of this Plan, shall be subject to further restrictions upon transfer.

(c) The Committee may determine that Option Rights (other than Incentive Stock Options) and
Appreciation Rights may be transferable by

a Participant, without payment of consideration therefor by the transferee, only to any one or
more members of the Participant’s immediate family; provided, however, that (i) no such transfer
shall be effective unless reasonable prior notice thereof is delivered to the Corporation and

such transfer is thereafter effected in accordance with any terms and conditions that shall have
been made applicable thereto by the Corporation

or the Committee and (ii) any such transferee shall be subject to the same terms and conditions
hereunder as the Participant. For the purposes of

this Section 15(c), the term “immediate family” means any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, sibling, mother-in -law, father-in -law, son-in -law,
daughter-in -law, brother-in -law, or sister-in -law, including adoptive relationships, any
person

sharing the Participant’s household (other than a tenant or employee), a trust in which these
persons have more than fifty percent of the beneficial interest, a foundation in which these
persons (or the Participant) control the management of assets, and any other entity in which
these persons (or the Participant) own more than fifty percent of the voting interests.

16. Withholding Taxes. To the extent that the Corporation is required to withhold federal,
state, local or foreign taxes in connection with

any payment made or benefit realized by a Participant or other person under this Plan, and the
amounts available the Corporation for the

withholding are insufficient, it shall be a condition to the receipt of any such payment or the
realization of any such benefit that the Participant

or such other person make arrangements satisfactory to the Corporation for payment of the balance
of any taxes required to be withheld. At the

discretion of the Committee, any such arrangements may without limitation include relinquishment
of a portion of any such payment or benefit. Participants shall also make such arrangements as the
Corporation may require for the payment of any withholding tax obligation that may

arise in connection with the disposition of Common Shares acquired upon the exercise of Option
Rights. In no event shall the Market Value per

Share of the Common Shares to be withheld and/or delivered pursuant to this Section to satisfy
applicable withholding taxes in connection with

the benefit exceed the minimum amount of taxes required to be withheld.

17. Compliance with Section 409A of the Code.

(a) To the extent applicable, it is intended that this Plan and any grants made hereunder
comply with the provisions of Section 409A of

the Code. This Plan and any grants made hereunder shall be administrated in a manner consistent
with this intent, and any provision that

would cause this Plan or any grant made hereunder to fail to satisfy Section 409A of the Code
shall have no force and effect until amended

to comply with Section 409A of the Code (which amendment may be retroactive to the extent
permitted by Section 409A of the Code and may be made by the Corporation without the consent of
Participants). Any reference in this Plan to Section 409A of the Code will also include any
proposed,

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14

temporary or final regulations, or any other guidance, promulgated with respect to such Section
by the U.S. Department of the Treasury or

the Internal Revenue Service.

(b) In order to determine for purposes of Section 409A of the Code whether a Participant is
employed by a member of the

Corporation’s controlled group of corporations under Section 414(b) of the Code (or by a member
of a group of trades or businesses under

common control with the Corporation under Section 414(c) of the Code) and, therefore, whether
the shares of Common Stock that are or have been purchased by or awarded under this 2006 Plan
to the Participant are shares of “service recipient” stock within the meaning of Section 409A
of the Code:

(i) In applying Code Section 1563(a)(1), (2) and (3) for purposes of determining the
Corporation’s controlled group under

Section 414(b) of the Code, the language “at least 50 percent” is to be used instead of “at
least 80 percent” each place it appears in

Code Section 1563(a)(1), (2) and (3), and

(ii) In applying Treasury Regulation Section 1.414(c)-2 for purposes of determining
trades or businesses under common control with the Corporation for purposes of Section
414(c) of the Code, the language “at least 50 percent” is to be used instead of “at least

80 percent” each place it appears in Treasury Regulation Section 1.414(c)-2.

18. Effective Date. This Plan will be effective as of May 2, 2006, the date the Plan is
approved by shareholders.

19. Amendments.

(a) The Committee may at any time and from time to time amend this Plan in whole or in part;
provided, however, that if an

amendment to this Plan (i) would materially increase the benefits accruing to participants under
this Plan, (ii) would materially increase the number of securities which may be issued under
this Plan, (iii) would materially modify the requirements for participation in this Plan or

(iv) must otherwise be approved by the shareholders of the Corporation in order to comply with
applicable law or the rules of the New

York Stock Exchange or, if the Common Shares are not traded on the New York Stock Exchange, the
principal national securities

exchange upon which the Common Shares are traded or quoted, then, such amendment will be subject
to shareholder approval and will not

be effective unless and until such approval has been obtained.

(b) The Committee shall not, without the further approval of the shareholders of the
Corporation, authorize the amendment of any outstanding Option Right to reduce the Option
Price. Furthermore, no Option Right will be cancelled and replaced with awards having a

lower Option Price without further approval of the shareholders of the Corporation. This Section
19(b) is intended to prohibit the repricing

of “underwater” Option Rights and shall not be construed to prohibit the adjustments provided
for in Section 11 of this Plan.

(c) If permitted by Section 409A of the Code and except in the case of a Covered Employee
where such action would result in the loss

of an otherwise available exemption under Section 162(m) of the Code, in case of termination of
employment by reason of death, disability

or normal or early retirement, or in the case of unforeseeable emergency or other special
circumstances, of a Participant who holds an

Option Right or Appreciation Right not immediately exercisable in full, or any Performance
Restricted Shares, Restricted Shares as to

which the substantial risk of forfeiture or the prohibition or restriction on transfer has not
lapsed, or any Restricted Stock Units as to which

the Restriction Period has not been completed, or any Performance Shares or Performance Units
which have not been fully earned, or who holds Common Shares subject to any transfer restriction
imposed pursuant to Section 15 of this Plan, the Committee may, in its sole

discretion, accelerate the time at which such Option Right or Appreciation Right may be

exercised or the time at which such substantial risk of forfeiture or prohibition or

restriction on transfer will lapse or the time when such Restriction Period will end or the

time at which

such Performance Shares or Performance Units will be deemed to have been fully earned or the
time when such transfer restriction will terminate or may waive any other limitation or
requirement under any such award.

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15

(d) Subject to Section 19(b) hereof, the Committee may amend the terms of any award
theretofore granted under this Plan

prospectively or retroactively and except in the case of a Covered Employee where such action
would result in the loss of an otherwise available exemption under Section 162(m) of the Code,
but subject to Section 11 above, no such amendment shall impair the rights of any Participant
without his or her consent. The Committee may, in its discretion, terminate this Plan at any
time. Termination of this Plan will

not affect the rights of Participants or their successors under any awards outstanding hereunder
and not exercised in full on the date of

termination.

20. Termination of the Plan. No further awards shall be granted under this Plan after the
passage of 10 years from the date on which this

Plan was first approved by the shareholders of the Corporation.

21. Governing Law. The Plan and all grants and awards and actions taken thereunder shall be
governed by and construed in accordance with the internal substantive laws of the State of Ohio.

22. Miscellaneous Provisions.

(a) The Corporation shall not be required to issue any fractional Common Shares pursuant to
this Plan. The Committee may provide for

the elimination of fractions or for the settlement of fractions in cash.

(b) This Plan shall not confer upon any Participant any right with respect to continuance
of employment or other service with the Corporation or any Subsidiary, nor shall it interfere in
any way with any right the Corporation or any Subsidiary would otherwise have to terminate such
Participant’s employment or other service at any time.

(c) To the extent that any provision of this Plan would prevent any Option Right that was
intended to qualify as a Tax-qualified Option from qualifying as such, that provision shall be
null and void with respect to such Option Right. Such provision, however, will remain in effect
for other Option Rights and there will be no further effect on any provision of this Plan.

(d) No award under this Plan may be exercised by the holder thereof if such exercise, and the
receipt of cash or stock thereunder, would

be, in the opinion of counsel selected by the Committee, contrary to law or the regulations of
any duly constituted authority having

jurisdiction over this Plan.

(e) Leave of absence approved by a duly constituted officer of the Corporation or any of
its Subsidiaries shall not be considered interruption or termination of service of any employee
for any purposes of this Plan or awards granted hereunder, except that no awards may be granted
to an employee while he or she is on a leave of absence.

(f) No Participant shall have any rights as a shareholder with respect to any shares subject
to awards granted to him or her under this

Plan prior to the date as of which he or she is actually recorded as the holder of such shares
upon the stock records of the Corporation.

(g) The Committee may condition the grant of any award or combination of awards
authorized under this Plan on the surrender or deferral by the Participant of his or her
right to receive a cash bonus or other compensation otherwise payable by the Corporation or
a Subsidiary to the Participant.

(h) If any provision of this Plan is or becomes invalid, illegal or unenforceable in any
jurisdiction, or would disqualify this Plan or any award under any law deemed applicable by the
Board, such provision shall be construed or deemed amended or limited in scope to

conform to applicable laws or, in the discretion of the Board, it shall be stricken and the
remainder of this Plan shall remain in full force

and effect.

14

16EX-10.2

Exhibit 10.2

BRUSH ENGINEERED MATERIALS INC.

Agreement Relating to

Performance Restricted Shares and Performance Shares

WHEREAS,      (the “Grantee”) is an employee of Brush Engineered
Materials Inc., an Ohio corporation (the “Corporation”), or a Subsidiary; and

WHEREAS, the execution of an agreement in the form hereof (this “Agreement”) has been
authorized by resolution of the Organization and Compensation Committee (the “Committee”) of the
Board of Directors of the Corporation that was duly adopted on March 7, 2006 (the “Date of Grant”);

NOW, THEREFORE, pursuant to the Corporation’s 2006 Stock Incentive Plan (the “Plan”), the
Corporation hereby grants to the Grantee      Performance Restricted Shares and one-half
that number of Performance Shares, effective as of the Date of Grant, but subject to Shareholder
Approval (as defined in Section 11 of Article IV of this Agreement) and subject to the terms and
conditions of the Plan and the following additional terms, conditions, limitations and
restrictions:

ARTICLE I

DEFINITIONS

All terms used herein with initial capital letters that are defined in the Plan shall have the
meanings assigned to them in the Plan, and the following additional terms, when used herein with
initial capital letters, shall have the following meanings:

1. “Change in Control” has the meaning set forth in Section 4(b) of Article II of this
Agreement.

2. “Cumulative Operating Profit” means the sum of earnings (net of any losses) before tax and
interest during the Performance Period for the business unit specified to the Grantee in the notice
accompanying this Agreement.

3. “Management Objective” means the threshold, target and maximum Cumulative Operating Profit
goals established by the Committee for the Performance Period as set forth on Exhibit D to the
resolution of the Committee adopted on February 7, 2006. No adjustment of the Management Objective
shall be permitted in respect of any Performance Restricted Shares or Performance Shares granted to
any Participant who is, or is determined by the Committee to be likely to become, a “covered
employee” within the meaning of Section 162(m) of the Code (or any successor provision) if such
adjustment would result in the loss of an otherwise available deduction.

4. “Performance Period” means the three-year period commencing January 1, 2006 and ending on
December 31, 2008.

ARTICLE II

CERTAIN TERMS OF PERFORMANCE RESTRICTED SHARES

1. Issuance of Performance Restricted Shares. The Performance Restricted Shares
covered by this Agreement shall be issued to the Grantee, effective as of the Date of Grant, upon
the approval of the Plan by the shareholders of the Corporation in accordance with Section 11 of
Article IV of this Agreement. The Common Shares subject to this grant of Performance Restricted
Shares, when issued, shall be fully paid and nonassessable and shall be represented by a
certificate or certificates registered in the Grantee’s name, endorsed with an appropriate legend
referring to the restrictions hereinafter set forth.

2. Restrictions on Transfer of Shares. The Common Shares subject to this grant of
Performance Restricted Shares may not be sold, exchanged, assigned, transferred, pledged,
encumbered or otherwise disposed of by the Grantee except to the Corporation until the Performance
Restricted Shares have become nonforfeitable as provided in Section 3 hereof, provided,
however, that the Grantee’s rights with respect to such Common Shares may be transferred by
will or pursuant to the laws of descent and distribution. Any purported transfer or encumbrance in
violation of the provisions of this Section 2 of this Article II shall be void, and the other party
to any such purported transaction shall not obtain any rights to or interest in such Common Shares.
The Corporation in its sole discretion, when and as permitted by the Plan, may waive the
restrictions on transferability with respect to all or a portion of the Common Shares subject to
this grant of Performance Restricted Shares.

3. Vesting of Performance Restricted Shares.

(a) In no event shall any Performance Restricted Shares become nonforfeitable if actual
achievement falls below the threshold level of the Management Objective. If the Management
Objective shall have been attained at the threshold level and if the Grantee shall have remained in
the continuous employ of the Corporation or a Subsidiary throughout the Performance Period, 25% of
the number of Performance Restricted Shares specified on the first page of this Agreement shall be
earned.

(b) If the Management Objective shall have been attained at the target level and if the
Grantee shall have remained in the continuous employ of the Corporation or a Subsidiary throughout
the Performance Period, 100% of the number of Performance Restricted Shares specified on the first
page of this Agreement shall be earned. If the Management Objective shall have been attained over
the threshold level, but less than the target level, and the Grantee has remained so continuously
employed, a proportionate number of the Performance Restricted Shares specified on the first page
of this Agreement shall be earned, as determined by mathematical interpolation.

(c) Any fraction of a Performance Restricted Share resulting from the foregoing calculations
shall be rounded to the nearest 1/100th of a share.

4. Effect of Death, Disability, Change in Control.

(a) Notwithstanding the provisions of Section 3 of this Article II, all of the Performance
Restricted Shares covered by this Agreement shall immediately become nonforfeitable (i) if the
Grantee dies or becomes permanently disabled while in the employ of the Corporation or a Subsidiary
during the Performance Period and [after the receipt of Shareholder Approval], or (ii) if a Change
in Control occurs during the Performance Period [and after the receipt of Shareholder Approval].

(b) For purposes of this Agreement, “Change in Control” means

(i) The acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of voting securities of the Company where such acquisition causes
such Person to own (X) 20% or more of the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the election of directors
(the “Outstanding Company Voting Securities”) without the approval of the Incumbent Board as
defined in (ii) below or (Y) 35% or more of the Outstanding Voting Securities of the Company
with the approval of the Incumbent Board; provided, however, that for purposes of this
subsection (i), the following acquisitions shall not be deemed to result in a Change of
Control: (A) any acquisition directly from the Company that is approved by the Incumbent
Board (as defined in subsection (ii), below), (B) any acquisition by the Company or a
subsidiary of the Company, (C) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation controlled by the Company,
(D) any acquisition by any Person pursuant to a transaction described in clauses (A), (B)
and (C) of subsection (iii) below, or (E) any acquisition by, or other Business Combination
(as defined in (iii) below) with, a person or group of which employees of the Company or any
subsidiary of the Company control a greater than 25% interest (a “MBO”) but only if the
Executive is one of those employees of the Company or any subsidiary of the Company that are
participating in the MBO; provided, further, that if any Person’s beneficial ownership of
the Outstanding Company Voting Securities reaches or exceeds 20% or 35%, as the case may be,
as a result of a transaction described in clause (A) or (B) above, and such Person
subsequently acquires beneficial ownership of additional voting securities of the Company,
such subsequent acquisition shall be treated as an acquisition that causes such Person to
own 20% or 35% or more, as the case may be, of the Outstanding Company Voting Securities;
and provided, further, that if at least a majority of the members of the Incumbent Board
determines in good faith that a Person has acquired beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of the Outstanding Company
Voting Securities inadvertently, and such Person divests as promptly as practicable a
sufficient number of shares so that such Person beneficially owns (within the meanings of
Rule 13d-3 promulgated under the Exchange Act) less than 20% of the Outstanding Company
Voting Securities, then no Change of Control shall have occurred as a result of such
Person’s acquisition; or

(ii) individuals who, as of the date hereof, constitute the Board (the “Incumbent
Board” (as modified by this clause (ii)) cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a director subsequent
to the date hereof whose election, or nomination for election by the Company’s shareholders,
was approved by a vote of at least a majority of the directors then comprising the Incumbent
Board (either by a specific vote or by approval of the proxy statement of the Company in
which such person is named as a nominee for director, without objection to such nomination)
shall be considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of office occurs
as a result of an actual or threatened election contest with respect to the election or
removal of directors or other actual or threatened solicitation of proxies or consents by or
on behalf of a Person other than the Board; or

(iii) the consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Company or the acquisition of
assets of another corporation, or other transaction (“Business Combination”) excluding,
however, such a Business Combination pursuant to which (A) the individuals and entities who
were the ultimate beneficial owners of voting securities of the Company immediately prior to
such Business Combination beneficially own, directly or indirectly, more than 65% of,
respectively, the then outstanding shares of common stock and the combined voting power of
the then outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the entity resulting from such Business Combination
(including, without limitation, an entity that as a result of such transaction owns the
Company or all or substantially all of the Company’s assets either directly or through one
or more subsidiaries), (B) no Person (excluding any employee benefit plan (or related trust)
of the Company, the Company or such entity resulting from such Business Combination)
beneficially owns, directly or indirectly (X) 20% or more, if such Business Combination is
approved by the Incumbent Board or (Y) 35% or more, if such Business Combination is not
approved by the Incumbent Board, of the combined voting power of the then outstanding
securities entitled to vote generally in the election of directors of the entity resulting
from such Business Combination and (C) at least a majority of the members of the board of
directors of the corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or of the action of
the Board, providing for such Business Combination; or

(iv) approval by the shareholders of the Company of a complete liquidation or
dissolution of the Company except pursuant to a Business Combination described in clauses
(A), (B) and (C) of subsection (iii), above.

5. Effect of Retirement. Notwithstanding the provisions of Section 3 of this Article
II, if the Grantee retires after the receipt of Shareholder Approval and after June 30, 2007 under
a retirement plan of the Corporation or a Subsidiary at or after the normal retirement age provided
for in such retirement plan or retires at an earlier age with the consent of the Committee, a
portion of the Performance Restricted Shares covered by this Agreement shall become nonforfeitable
after the end of the Performance Period if the Committee then determines that the Management
Objective have been attained at the threshold level of achievement. The number of Performance
Restricted Shares that shall become nonforfeitable shall be determined by multiplying the number of
Performance Restricted Shares that would have become nonforfeitable if the Grantee had remained in
the continuous employment of the Corporation throughout the Performance Period, multiplied by the
fraction of the Performance Period that is equal to the number of months the Grantee remained in
the continuous employ of the Corporation and its Subsidiaries between the Date of Grant and the
effective date of such retirement, divided by 36. If the grantee retires on or before June 30,
2007, the Performance Shares granted under this Agreement shall be forfeited.

6. Effect of Detrimental Activity. Notwithstanding anything herein to the contrary,
if the Grantee, either during employment by the Corporation or a Subsidiary or within one year
after termination of such employment, shall engage in any Detrimental Activity (as defined in
Section 7 below) and the Board shall so find:

(a) Return to the Corporation any all Performance Restricted Shares that the Grantee has not
disposed of that became nonforfeitable pursuant to this Agreement.

(b) With respect to any Performance Restricted Shares that the Grantee has disposed of that
became nonforefeitable pursuant to this Agreement within a period of one year prior to the date of
the commencement of such Detrimental Activity, the Grantee shall pay to the Corporation in the cash
value of such Performance Restricted Shares on the date such Performance Restricted Shares became
nonforfeitable. To the extent that such amounts are not paid to the Corporation, the Corporation
may, to the extent permitted by law, set off the amounts so payable to it against any amounts that
may be owing from time to time by the Corporation or a Subsidiary to the Grantee, whether as wages,
deferred compensation or vacation pay or in the form of any other benefit or for any other reason.

7. Definition of Detrimental Activity. For purposes of this Agreement, the term
“Detrimental Activity” shall include:

(a) (i) Engaging in any activity in violation of the Section entitled “Competitive
Activity; Confidentiality; Nonsolicitation” in the Severance Agreement between the
Corporation and the Grantee, if such agreement is in effect at the date hereof, or in
violation of any corresponding provision in any other agreement between the Corporation and
the Grantee in effect on the date hereof providing for the payment of severance
compensation; or

(ii) If no such severance agreement is in effect as of the date hereof or if a
severance agreement does not contain a Section corresponding to “Competitive Activity;
Confidentiality; Nonsolicitation”:

	 	A.	 	Competitive Activity During Employment. Competing with
the Corporation anywhere within the United States during the term of the
Grantee’s employment, including, without limitation:

	 	(1)	 	entering into or engaging in any business which
competes with the business of the Corporation;

	 	(2)	 	soliciting customers, business, patronage or
orders for, or selling, any products or services in competition with,
or for any business that competes with, the business of the
Corporation;

	 	(3)	 	diverting, enticing or otherwise taking away
any customers, business, patronage or orders of the Corporation or
attempting to do so; or

	 	(4)	 	promoting or assisting, financially or
otherwise, any person, firm, association, partnership, corporation or
other entity engaged in any business which competes with the business
of the Corporation.

	 	B.	 	Following Termination. For a period of one year
following the Grantee’s termination date:

	 	(1)	 	entering into or engaging in any business which
competes with the Corporation’s business within the Restricted
Territory (as hereinafter defined);

	 	(2)	 	soliciting customers, business, patronage or
orders for, or selling, any products or services in competition with,
or for any business, wherever located, that competes with, the
Corporation’s business within the Restricted Territory;

	 	(3)	 	diverting, enticing or otherwise taking away
any customers, business, patronage or orders of the Corporation within
the Restricted Territory, or attempting to do so; or

	 	(4)	 	promoting or assisting, financially or
otherwise, any person, firm, association, partnership, corporation or
other entity engaged in any business which competes with the
Corporation’s business within the Restricted Territory.

For the purposes of Sections 7(a)(ii)(A) and (B) above, inclusive, but
without limitation thereof, the Grantee will be in violation thereof if the
Grantee engages in any or all of the activities set forth therein directly
as an individual on the Grantee’s own account, or indirectly as a partner,
joint venturer, employee, agent, salesperson, consultant, officer and/or
director of any firm, association, partnership, corporation or other entity,
or as a stockholder of any corporation in which the Grantee or the Grantee’s
spouse, child or parent owns, directly or indirectly, individually or in the
aggregate, more than five percent (5%) of the outstanding stock.

	 	C.	 	"The Corporation.” For the purposes of this Section
7(a)(ii) of this Article II, the “Corporation” shall include any and all direct
and indirect subsidiaries, parents, and affiliated, or related companies of the
Corporation for which the Grantee worked or had responsibility at the time of
termination of the Grantee’s employment and at any time during the two year
period prior to such termination.

	 	D.	 	"The Corporation’s Business.” For the purposes of this
Section 7 of this Article II inclusive, the Corporation’s business is defined
to be the manufacture, marketing and sale of high performance engineered
materials serving global telecommunications and computer, magnetic and optical
data storage, aerospace and defense, automotive electronics, industrial
components and appliance markets as further described in any and all
manufacturing, marketing and sales manuals and materials of the Corporation as
the same may be altered, amended, supplemented or otherwise changed from time
to time, or of any other products or services substantially similar to or
readily substitutable for any such described products and services.

	 	E.	 	"Restricted Territory.” For the purposes of Section
7(a)(ii)(B) of this Article II, the Restricted Territory shall be defined as
and limited to:

	 	(1)	 	the geographic area(s) within a one hundred
mile radius of any and all Corporation location(s) in, to, or for which
the Grantee worked, to which the Grantee was assigned or had any
responsibility (either direct or supervisory) at the time of
termination of the Grantee’s employment and at any time during the
two-year period prior to such termination; and

	 	(2)	 	all of the specific customer accounts, whether
within or outside of the geographic area described in (1) above, with
which the Grantee had any contact or for which the Grantee had any
responsibility (either direct or supervisory) at the time of
termination of the Grantee’s employment and at any time during the
two-year period prior to such termination.

	 	F.	 	“Extension.” If it shall be judicially determined that
the Grantee has violated any of the Grantee’s obligations under Section
7(a)(ii)(B) of this Agreement, then the period applicable to each obligation
that the Grantee shall have been determined to have violated shall
automatically be extended by a period of time equal in length to the period
during which such violation(s) occurred.

(b) Non-Solicitation. Except as otherwise provided in Section 7(a)(i) of this Article
II, Detrimental Activity shall also include directly or indirectly at any time soliciting or
inducing or attempting to solicit or induce any employee(s), sales representative(s), agent(s) or
consultant(s) of the Corporation and/or of its parents, or its other subsidiaries or affiliated or
related companies to terminate their employment, representation or other association with the
Corporation and/or its parent or its other subsidiary or affiliated or related companies.

(c) Further Covenants. Except as otherwise provided in Section 7(a)(i) of this
Article II, Detrimental Activity shall also include:

(i) directly or indirectly, at any time during or after the Grantee’s employment with
the Corporation, disclosing, furnishing, disseminating, making available or, except in the
course of performing the Grantee’s duties of employment, using any trade secrets or
confidential business and technical information of the Corporation or its customers or
vendors, including without limitation as to when or how the Grantee may have acquired such
information. Such confidential information shall include, without limitation, the
Corporation’s unique selling, manufacturing and servicing methods and business techniques,
training, service and business manuals, promotional materials, training courses and other
training and instructional materials, vendor and product information, customer and
prospective customer lists, other customer and prospective customer information and other
business information. The Grantee specifically acknowledges that all such confidential
information, whether reduced to writing, maintained on any form of electronic media, or
maintained in the Grantee’s mind or memory and whether compiled by the Corporation, and/or
the Grantee, derives independent economic value from not being readily known to or
ascertainable by proper means by others who can obtain economic value from its disclosure or
use, that reasonable efforts have been made by the Corporation to maintain the secrecy of
such information, that such information is the sole property of the Corporation and that any
retention and use of such information by the Grantee during the Grantee’s employment with
the Corporation (except in the course of performing the Grantee’s duties and obligations to
the Corporation) or after the termination of the Grantee’s employment shall constitute a
misappropriation of the Corporation’s trade secrets.

(ii) Upon termination of the Grantee’s employment with the Corporation, for any reason,
the Grantee’s failure to return to the Corporation, in good condition, all property of the
Corporation, including without limitation, the originals and all copies of any materials
which contain, reflect, summarize, describe, analyze or refer or relate to any items of
information listed in Section 7(c)(i) of this Article II.

(d) Discoveries and Inventions. Except as otherwise provided in Section 7(a)(i) of
this Article II, Detrimental Activity shall also include the failure or refusal of the Grantee to
assign to the Corporation, its successors, assigns or nominees, all of the Grantee’s rights to any
discoveries, inventions and improvements, whether patentable or not, made, conceived or suggested,
either solely or jointly with others, by the Grantee while in the Corporation’s employ, whether in
the course of the Grantee’s employment with the use of the Corporation’s time, material or
facilities or that is in any way within or related to the existing or contemplated scope of the
Corporation’s business. Any discovery, invention or improvement relating to any subject matter
with which the Corporation was concerned during the Grantee’s employment and made, conceived or
suggested by the Grantee, either solely or jointly with others, within one year following
termination of the Grantee’s employment under this Agreement or any successor agreements shall be
irrebuttably presumed to have been so made, conceived or suggested in the course of such employment
with the use of the Corporation’s time, materials or facilities. Upon request by the Corporation
with respect to any such discoveries, inventions or improvements, the Grantee will execute and
deliver to the Corporation, at any time during or after the Grantee’s employment, all appropriate
documents for use in applying for, obtaining and maintaining such domestic and foreign patents as
the Corporation may desire, and all proper assignments therefor, when so requested, at the expense
of the Corporation, but without further or additional consideration.

(e) Work Made For Hire. Except as otherwise provided in Section 7(a)(i) of this
Article II, Detrimental Activity shall also include violation of the Corporation’s rights in any or
all work papers, reports, documentation, drawings, photographs, negatives, tapes and masters
therefor, prototypes and other materials (hereinafter, “items”), including without limitation, any
and all such items generated and maintained on any form of electronic media, generated by Grantee
during the Grantee’s employment with the Corporation. The Grantee acknowledges that, to the extent
permitted by law, all such items shall be considered a “work made for hire” and that ownership of
any and all copyrights in any and all such items shall belong to the Corporation. The item will
recognize the Corporation as the copyright owner, will contain all proper copyright notices, e.g.,
"(creation date) [Corporation Name], All Rights Reserved,” and will be in condition to be
registered or otherwise placed in compliance with registration or other statutory requirements
throughout the world.

(f) Termination for Cause. Except as otherwise provided in Section 7(a)(i) of this
Agreement, Detrimental Activity shall also include activity that results in termination for Cause.
For the purposes of this Section 7, “Cause” shall mean that, the Grantee shall have:

(i) been convicted of a criminal violation involving fraud, embezzlement, theft or
violation of federal antitrust statutes or federal securities laws in connection with his
duties or in the course of his employment with the Corporation or any affiliate of the
Corporation;

(ii) committed intentional wrongful damage to property of the Corporation or any
affiliate of the Corporation; or

(iii) committed intentional wrongful disclosure of secret processes or confidential
information of the Corporation or any affiliate of the Corporation;

and

any such act shall have been demonstrably and materially harmful to the Corporation.

(g) Other Injurious Conduct. Detrimental Activity shall also include any other
conduct or act determined to be injurious, detrimental or prejudicial to any significant interest
of the Corporation or any subsidiary unless the Grantee acted in good faith and in a manner he or
she reasonably believed to be in or not opposed to the best interests of the Corporation.

(h) Reasonableness. The Grantee acknowledges that the Grantee’s obligations under
this Section 7 of this Agreement are reasonable in the context of the nature of the Corporation’s
business and the competitive injuries likely to be sustained by the Corporation if the Grantee were
to violate such obligations. The Grantee further acknowledges that this Agreement is made in
consideration of, and is adequately supported by the agreement of the Corporation to perform its
obligations under this Agreement and by other consideration, which the Grantee acknowledges
constitutes good, valuable and sufficient consideration.

8. Forfeiture of Shares. The Performance Restricted Shares shall be forfeited to the
extent they fail to become nonforfeitable at the end of the Performance Period and, except as
otherwise provided in Sections 4 or 5 of this Article II, if the Grantee ceases to be employed by
the Corporation or a Subsidiary at any time prior to such Shares becoming nonforfeitable.

In the event of a forfeiture, any certificate(s) representing the Performance Restricted Shares
covered by this Agreement shall be cancelled.

9. Dividend, Voting and Other Rights.

(a) Except as otherwise provided herein, from and after the receipt of Shareholder Approval,
the Grantee shall have all of the rights of a shareholder with respect to the Performance
Restricted Shares covered by this Agreement, including the right to vote such Performance
Restricted Shares and receive any dividends that may be paid thereon; provided,
however, that any additional Common Shares or other securities that the Grantee may become
entitled to receive pursuant to a stock dividend, stock split, combination of shares,
recapitalization, merger, consolidation, separation or reorganization or any other change in the
capital structure of the Corporation shall be subject to the same restrictions as the Performance
Restricted Shares covered by this Agreement.

(b) Cash dividends on the Performance Restricted Shares covered by this Agreement after the
receipt of Shareholder Approval shall be sequestered by the Corporation from and after the Date of
Grant until such time as any of such Performance Restricted Shares become nonforfeitable in
accordance with Section 3 of this Article II, whereupon such dividends shall be paid to the Grantee
in cash to the extent such dividends are attributable to Performance Restricted Shares that have
become nonforfeitable. To the extent that Performance Restricted Shares covered by this Agreement
are forfeited pursuant to Section 8 of this Article II, all the dividends sequestered with respect
to such Performance Restricted Shares shall also be forfeited. No interest shall be payable with
respect to any such dividends.

10. Retention of Stock Certificate(s) by the Corporation. Any certificate(s)
representing the Performance Restricted Shares covered by this Agreement shall be held in custody
by the Corporation, together with a stock power endorsed in blank by the Grantee with respect
thereto, until those shares have become nonforfeitable in accordance with Sections 3, 4 or 5 of
this Article II.

ARTICLE III

CERTAIN TERMS OF PERFORMANCE SHARES

1. Issuance of Performance Shares. The Performance Shares covered by this Agreement
shall only result in the issuance of Common Shares after the completion of the Performance Period
and only if they are earned as provided in Section 2 of this Article III.

2. Earn-Out of Performance Shares. All of the Performance Shares covered by this
Agreement shall be earned if the Grantee shall have remained in the continuous employ of the
Corporation or a Subsidiary throughout the Performance Period and if the Management Objective shall
have been at least attained at the maximum level of achievement. If the Management Objective shall
have been attained at a level between the target and maximum levels of achievement and the Grantee
has remained so continuously employed, a portion of the Performance Shares covered by this
Agreement shall be earned out, as determined by mathematical interpolation. In no event shall any
Performance Shares be earned if actual achievement falls at or below the target level of the
Management Objective.

3. Payment of Performance Shares.

(a) Payment shall be made in the form of cash equal to the average of the high and low sales
prices of the Common Shares of the Corporation on the New York Stock Exchange on the last day of
the Performance Period multiplied by the number of Performance Shares earned pursuant to Section 2
of Article III this Agreement. Final awards shall be paid, less applicable taxes, as soon as
practicable after the receipt of audited financial statements relating to the last fiscal year of
the Performance Period and the determination by the Committee of the level of attainment of the
Management Objective, but in no event later than two and one-half months after the end of the last
fiscal year in the Performance Period.

(b) Any payment of awards due pursuant to this Agreement to a deceased Grantee shall be paid
to the beneficiary designated by the Grantee on the Designation of Death Beneficiary attached as
Exhibit A hereto and filed with the Corporation. If no such beneficiary has been
designated or survives the Grantee, payment shall be made to the Grantee’s legal representative. A
beneficiary designation may be changed or revoked by a Grantee at any time, provided the change or
revocation is filed with the Corporation.

(c) Prior to payment, the Corporation shall only have an unfunded and unsecured obligation to
make payment of earned awards to the Grantee.

4. Performance Shares Nontransferable. The Performance Shares covered by this
Agreement that have not yet been earned out are not transferable other than by will or pursuant to
the laws of descent and distribution.

ARTICLE IV

GENERAL PROVISIONS

1. Compliance with Law. The Corporation shall make reasonable efforts to comply with
all applicable federal and state securities laws; provided, however,
notwithstanding any other provision of this Agreement, the Corporation shall not be obligated to
issue any Common Shares pursuant to this Agreement if the issuance thereof would result in a
violation of any such law.

2. Dilution and Other Adjustments. The Committee shall make such adjustments in the
Management Objective and/or Performance Shares covered by this Agreement as such Committee in its
sole discretion, exercised in good faith, may determine is equitably required to prevent dilution
or enlargement of the rights of the Grantee that otherwise would result from (a) any stock
dividend, stock split, combination of shares, recapitalization or other change in the capital
structure of the Corporation, or (b) any merger, consolidation, spin-off, reorganization, partial
or complete liquidation or other distribution of assets, or issuance of warrants or other rights to
purchase securities, or (c) any other corporate transaction or event having an effect similar to
any of the foregoing. In the event of any such transaction or event, the Committee may provide in
substitution for this award of Performance Shares such alternative consideration as it may in good
faith determine to be equitable under the circumstances and may require in connection therewith the
surrender of this award of Performance Shares so replaced

3. Withholding Taxes. If the Corporation or any Subsidiary shall be required to
withhold any federal, state, local or foreign tax in connection with any issuance or vesting of
Common Shares or other securities pursuant to this Agreement, the Grantee shall pay the tax or make
provisions that are satisfactory to the Corporation or such Subsidiary for the payment thereof.
The Grantee may elect to satisfy all or any part of any such withholding obligation by surrendering
to the Corporation or such Subsidiary a portion of the Common Shares that are issued or transferred
or that become nontransferable by the Grantee hereunder, and the Common Shares so surrendered by
the Grantee shall be credited against any such withholding obligation at the Market Value per Share
of such Common Shares on the date of such surrender. In no event shall the Market Value per Share
of the Common Shares to be withheld and/or delivered pursuant to this Section to satisfy applicable
withholding taxes in connection with the benefit exceed the minimum amount of taxes required to be
withheld.

4. Continuous Employment. For purposes of this Agreement, the continuous employment
of the Grantee with the Corporation or a Subsidiary shall not be deemed to have been interrupted,
and the Grantee shall not be deemed to have ceased to be an employee of the Corporation or a
Subsidiary, by reason of the transfer of his employment among the Corporation and its Subsidiaries
or a leave of absence approved by the Board.

5. Right to Terminate Employment. No provision of this Agreement shall limit in any
way whatsoever any right that the Corporation or a Subsidiary may otherwise have to terminate the
employment of the Grantee at any time.

6. Amendments. Any amendment to the Plan shall be deemed to be an amendment to this
Agreement to the extent that the amendment is applicable hereto; provided, however,
that no amendment shall adversely affect the rights of the Grantee with under this Agreement
without the Grantee’s consent.

7. Severability. In the event that one or more of the provisions of this Agreement
shall be invalidated for any reason by a court of competent jurisdiction, any provision so
invalidated shall be deemed to be separable from the other provisions hereof, and the remaining
provisions hereof shall continue to be valid and fully enforceable.

8. Governing Law. This agreement is made under, and shall be construed in accordance
with, the internal substantive laws of the State of Ohio.

9. Compliance with Section 409A of the Code. To the extent applicable, it is intended
that this Agreement and the Plan comply with the provisions of Section 409A of the Code. This
Agreement and the Plan shall be administered in a manner consistent with this intent, and any
provision that would cause the Agreement or the Plan to fail to satisfy Section 409A of the Code
shall have no force and effect until amended to comply with Section 409A of the Code (which
amendment may be retroactive to the extent permitted by Section 409A of the Code and may be made by
the Corporation without the consent of the Grantee).

10. Requirement of Shareholder Approval. “Shareholder Approval” means the approval of
the Plan by the affirmative vote of the holders of a majority of the Common Shares present, or
represented, and entitled to vote on the matter at a meeting. All of the Performance Restricted
Shares and Performance Shares covered hereby shall be forfeited and this Agreement shall be null
and void and of no effect if Shareholder Approval has not been obtained prior to December 31, 2006.

The undersigned Grantee hereby accepts the award granted pursuant to this Restricted
Performance Share and Performance Share Agreement on the terms and conditions set forth herein.

Dated:

Grantee

Executed in the name of and on behalf of the Corporation at Cleveland, Ohio as of this      
day of      , 2006.

BRUSH ENGINEERED MATERIALS INC.

By

Michael C. Hasychak

Vice President, Treasurer and Secretary

1

EXHIBIT A

2006 STOCK INCENTIVE PLAN

BRUSH ENGINEERED MATERIALS INC.

BENEFICIARY DESIGNATIONS

In accordance with the terms and conditions of the 2006 Stock Incentive Plan of Brush
Engineered Materials Inc. (the “Plan”), I hereby designate the person(s) indicated below as my
beneficiary(ies) to receive any amounts payable under said Plan after my death.

Name

Address

Social Sec. Nos. of Beneficiary(ies)

Relationship(s)

Date(s) of Birth

In the event that the above-named beneficiary(ies) predecease(s) me, I hereby designate the
following person as beneficiary(ies);

Name

Address

Social Sec. Nos. of Beneficiary(ies)

Relationship(s)

Date(s) of Birth

I hereby expressly revoke all prior designations of beneficiary(ies), reserve the right to
change the beneficiary(ies) herein designated and agree that the rights of said beneficiary(ies)
shall be subject to the terms of the Plan. In the event that there is no beneficiary living at the
time of my death, I understand that the amounts payable under the Plan will be paid to my estate.

Date

(Signature)

(Print or type name)

2

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