Document:

EX-10ak

 

Exhibit 10ak

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 Compensation Committee (the “Committee”) of the Board of Directors
of the Corporation that was duly adopted on February 5, 2008;

          NOW, THEREFORE, pursuant to the Corporation’s 2006 Stock Incentive Plan (the “Plan”), the
Corporation hereby confirms to the Grantee the grant of,                      Performance Restricted
Shares and one-half that number of Performance Shares, effective on February 15, 2008 (the “Date of
Grant”), 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 A to the
resolution of the Committee adopted on February 15, 2008. No adjustment of the Management
Objective or the stock prices performance criteria set forth in Section 3(b) of Article II 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, 2008 and ending on
December 31, 2010.

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 on the Date of Grant. The
Common Shares subject to this grant of Performance Restricted Shares, when issued, shall be fully
paid and nonassessable.

     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,

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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) Except as provided in paragraph (b) of this Section 3 of Article II, no Performance
Restricted Shares shall 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 actual achievement falls below the threshold level of the Management Objective, but the
performance of the Common Shares during the Performance Period falls within the top quartile of the
Russell 2000 and 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, unless a lesser percentage is
determined by the Committee. The top quartile stock performance shall be measured by comparing the
appreciation, if any, in the average of the daily closing prices during 2006 to the average of the
daily closing prices during 2009.

          (c) 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

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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.

          (d) 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, or (ii) if a Change in Control occurs during the Performance Period.

          (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 Corporation 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 Corporation entitled to vote generally in the election
of directors (the “Outstanding Corporation 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 Corporation with the approval of the

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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 Corporation that is approved by the Incumbent Board (as
defined in subsection (ii), below), (B) any acquisition by the Corporation or a subsidiary
of the Corporation, (C) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Corporation or any corporation controlled by the Corporation,
(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 Corporation or
any subsidiary of the Corporation control a greater than 25% interest (a “MBO”) but only if
the Executive is one of those employees of the Corporation or any subsidiary of the
Corporation that are participating in the MBO; provided, further, that if any Person’s
beneficial ownership of the Outstanding Corporation 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 Corporation, 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 Corporation 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 Corporation 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

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Exchange Act) less than 20% of the Outstanding Corporation 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 Corporation’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
Corporation 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 Corporation 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 Corporation 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

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resulting from such Business Combination (including, without limitation, an entity that
as a result of such transaction owns the Corporation or all or substantially all of the
Corporation’s assets either directly or through one or more subsidiaries), (B) no Person
(excluding any employee benefit plan (or related trust) of the Corporation, the Corporation
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 Corporation of a complete liquidation or
dissolution of the Corporation 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 terminates employment with the Corporation or a Subsidiary after June 30, 2008
and the Grantee is at the time of such termination (a) at least age 65 or (b) at least age 55 and
has completed at least 10 years continuous employment with the Corporation or a Subsidiary, 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

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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.

     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 nonforfeitable 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:

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     (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.

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	 	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

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	 	 	 	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

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	 	 	 	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:

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     (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

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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

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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.

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          (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, 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,

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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. Book Entry; Stock Certificate(s). The Common Shares subject to this grant of
Performance Restricted Shares shall be uncertificated and evidenced by book entry only until the
Performance Restricted Shares vest in pursuant to Section 3 of this Article II. At such time, a
Certificate or Certificates representing such shares (less any shares withheld for taxes pursuant
to Section 3 of Article IV hereof) shall be delivered to the Grantee.

ARTICLE III

CERTAIN TERMS OF PERFORMANCE SHARES

     1. Issuance of Performance Shares. The Performance Shares covered by this Agreement
shall only result in payment 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

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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 Market Value per Share 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, in the calendar year immediately following the close of the last
calendar year of the Performance Period to which the award of Performance Shares relates and as
soon as practicable after the receipt of audited financial statements relating to such 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 close of the last calendar
year of such 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.

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          (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.

19

 

     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. No Employment Contract; Right to Terminate Employment. The grant of the Restricted
Performance Shares and Performance under this Agreement to the Grantee is a voluntary,
discretionary award being made on a one-time basis and it does not constitute a commitment to make
any future awards. The grant of the Restricted Performance Shares and Performance under this
Agreement and any payments made hereunder will not be considered salary or other compensation for
purposes of any severance pay or similar allowance, except as otherwise required by law. Nothing
in this Agreement will give the Grantee any right to

20

 

continue employment with the Corporation or any Subsidiary, as the case may be, or interfere
in any way with the right of the Corporation or a Subsidiary to terminate the employment of the
Grantee at any time.

     6. Information. Information about the Grantee and the Grantee’s participation in the
Plan may be collected, recorded and held, used and disclosed for any purpose related to the
administration of the Plan. The Grantee understands that such processing of this information may
need to be carried out by the Corporation and its Subsidiaries and by third party administrators
whether such persons are located within the Grantee’s country or elsewhere, including the United
States of America. The Grantee consents to the processing of information relating to the Grantee
and the Grantee’s participation in the Plan in any one or more of the ways referred to above.

     7. 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 (provided, however, that the Grantee’s consent shall
not be required to an amendment that is deemed necessary by the Corporation to comply with Section
409A of the Code).

     8. 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.

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

21

 

     10. 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,
so that the income inclusion provisions of Section 409A(a)(1) of the Code do not apply to the
Grantee. This Agreement and the Plan shall be administered in a manner consistent with this
intent. Reference to Section 409A of the Code is to Section 409A of the Internal Revenue Code of
1986, as amended, and will also include any proposed, 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.

          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 22nd
day of February, 2008.

	 	 	 	 	 
	 	BRUSH ENGINEERED MATERIALS INC.

 	 
	By 	
 	 
	 	Michael C. Hasychak 	 
	 	Vice President, Treasurer and Secretary 	 
	 

22

 

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)EX-10an

 

Exhibit 10an

BRUSH ENGINEERED MATERIALS INC.

Appreciation Rights Agreement

     WHEREAS, [GRANTEE NAME] (the “Grantee”) is an employee of Brush Engineered Materials Inc. (the
“Corporation”) or a Subsidiary.

     WHEREAS, the execution of an agreement in the form hereof has been authorized by a resolution
of the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of the
Corporation that was duly adopted on February 5, 2008.

     NOW, THEREFORE, the Corporation hereby confirms to the Grantee the grant, effective on
February 15, 2008 (the “Date of Grant”), pursuant to the 2006 Stock Incentive Plan (the “Plan”), of
                     Free-standing Appreciation Rights (“SARs”) subject to the terms and conditions of the
Plan and the terms and conditions described below.

     1. Definitions.

          As used in this Agreement:

          (A) “Base Price” means $27.78 which was the Market Value per Share on the Date of Grant.

          (B) “Detrimental Activity” shall have the meaning set forth in Section 7 of this Agreement.

          (C) “Spread” means the excess of the Market value per Share on the date when an SAR is
exercised over the Base Price.

          (D) Capitalized terms used herein without definition shall have the meanings assigned to them
in the Plan.

     2. Grant of SARs.

          The Corporation hereby grants to the Grantee the number of SARs set forth above. The SARs are
a right to receive Common Shares in an amount equal to 100% of the Spread at the time of exercise.

     3. Vesting of SARs.

          (A) The SARs granted hereby shall become exercisable after the Grantee shall have remained in
the continuous employ of the Corporation or any Subsidiary for three years from the Date of Grant,
unless the Grantee ceases to be an employee of the Corporation or any Subsidiary as described in
Section 5(C) of this Agreement.

 

 

          (B) Notwithstanding the preceding paragraph, the SARs granted hereby shall become immediately
exercisable in full if (i) the Grantee should die while in the employ of the Corporation or any
subsidiary; (ii) the Grantee should become permanently disabled while in the employ of the
Corporation; or (iii) if a Change in Control occurs.

          (C) 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 Corporation 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 Corporation entitled to vote generally
in the election of directors (the “Outstanding Corporation 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
Corporation 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 Corporation that is approved by the Incumbent Board (as defined in
subsection (ii), below), (B) any acquisition by the Corporation or a
subsidiary of the Corporation, (C) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Corporation or any
corporation controlled by the Corporation, (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 Corporation or any subsidiary of the Corporation control a
greater than 25% interest (a “MBO”) but only if the Executive is one of
those employees of the Corporation or any subsidiary of the Corporation that
are participating in the MBO; provided, further, that if any Person’s
beneficial ownership of the Outstanding Corporation 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 Corporation, 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 Corporation 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 Corporation 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

2

 

Outstanding Corporation 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 Corporation’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 Corporation 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
Corporation 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 Corporation
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 Corporation or all or substantially all of the
Corporation’s assets either directly or through one or more subsidiaries),
(B) no Person (excluding any employee benefit plan (or related trust) of the
Corporation, the Corporation 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

3

 

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

     4. Exercise of SARs.

          (A) To the extent exercisable as provided in Section 3 of this agreement, SARs may be
exercised in whole or in part by giving notice to the Corporation specifying the number of SARs to
be exercised.

          (B) The Corporation will issue to the Grantee the number of Common Shares that equals the
Market Price per Share divided into the Spread on the date of exercise rounded down to the nearest
whole share.

     5. Termination of SARs.

     The SARs granted hereby shall terminate upon the earliest to occur of the following:

          (A) 190 days after the Grantee ceases to be an employee of the Corporation or a Subsidiary,
unless he ceases to be such employee by reason of death or in a manner described in clause
(B), (C) or (F) below;

          (B) One year after the Grantee ceases to be an employee of the Corporation or a Subsidiary if
the Grantee is disabled within the meaning of Section 105(d)(4) of the Internal Revenue Code;

          (C) Three years after the Grantee ceases to be an employee of the Corporation or a Subsidiary
if the Grantee is at the time of such termination (i) at least age 65 or (ii) at least age 55 and
has completed at least 10 years of continuous employment with the Corporation or a Subsidiary;

          (D) One year after the death of the Grantee, if the Grantee dies while an employee of the
Corporation or a subsidiary or within the period specified in (A) or (B) above which is applicable
to the Grantee;

          (E) Ten years from the Date of Grant; and

          (F) Immediately if the Grantee engages in any Detrimental Activity (as hereinafter defined).

          6. Effect of Detrimental Activity.

          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, and the Board shall
so find:

          (A) All SARs held by the Grantee, whether or not exercisable, shall be forfeited to the
Corporation.

4

 

          (B) Return to the Corporation all Common Shares that the Grantee has not disposed of that were
purchased pursuant to this Agreement, and

          (C) With respect to any Common Shares that the Grantee received upon exercise of the SARs that
have been disposed of pay to the Corporation in cash the amount equal to the Spread applicable to
such Common Shares on the date of exercise of such SARs.

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

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

          (a) Competitive Activity During Employment. Competing with the Corporation anywhere
within the United States during the term of the Optionee’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 Optionee’s
termination date:

5

 

     (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 Optionee will be in
violation thereof if the Optionee engages in any or all of the
activities set forth therein directly as an individual on the
Optionee’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 Optionee or the
Optionee’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), the “Corporation”
shall include any and all direct and indirect subsidiaries, parents, and affiliated, or related
companies of the Corporation for which the Optionee worked or had responsibility at the time of
termination of the Optionee’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 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), the Restricted
Territory shall be defined as and limited to:

6

 

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

     (B) Extension. If it shall be judicially determined that the
Optionee has violated any of the Optionee’s obligations under Section
7(A)(ii)(b), then the period applicable to each obligation that the Optionee
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), 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), Detrimental
Activity shall also include:

     (ii) directly or indirectly, at any time during or after the Optionee’s
employment with the Corporation, disclosing, furnishing, disseminating, making
available or, except in the course of performing the Optionee’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 Optionee 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 Optionee specifically acknowledges that all such
confidential information, whether reduced to writing, maintained on any form of
electronic media, or maintained in the Optionee’s mind or memory and whether
compiled by the Corporation, and/or the Optionee, derives independent economic value
from not being readily known to or ascertainable by proper means by others who can
obtain economic value from its

7

 

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
Optionee during the Optionee’s employment with the Corporation (except in the course
of performing the Optionee’s duties and obligations to the Corporation) or after the
termination of the Optionee’s employment shall constitute a misappropriation of the
Corporation’s trade secrets.

     (iii) Upon termination of the Optionee’s employment with the Corporation, for
any reason, the Optionee’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 4(C)(i) of this
Agreement.

          (D) Discoveries and Inventions. Except as otherwise provided in Section 7(A)(i),
Detrimental Activity shall also include the failure or refusal of the Optionee to assign to the
Corporation, its successors, assigns or nominees, all of the Optionee’s rights to any discoveries,
inventions and improvements, whether patentable or not, made, conceived or suggested, either solely
or jointly with others, by the Optionee while in the Corporation’s employ, whether in the course of
the Optionee’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 Optionee’s employment and made, conceived or suggested by the Optionee,
either solely or jointly with others, within one year following termination of the Optionee’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 Optionee will execute and deliver to the
Corporation, at any time during or after the Optionee’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), 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 Optionee during the
Optionee’s employment with the Corporation. The Optionee 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.

8

 

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

     (iv) 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;

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

     (vi) 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 Optionee 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 Optionee acknowledges that the Optionee’s obligations under
this Section 4 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 Optionee were to violate such
obligations. The Optionee 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 Optionee acknowledges constitutes good,
valuable and sufficient consideration.

     8. Transferability.

          No SAR granted hereunder may be transferred by the Grantee other than by will or the laws of
descent and distribution and may be exercised during a Grantee’s lifetime only by the Grantee or,
in the event of the Grantee legal incapacity, by the Grantee’s guardian or legal representative
acting in a fiduciary capacity on behalf of the Grantee under state law and court supervision.

     9. Compliance with Law.

          The SARs granted hereby shall not be exercisable if such exercise would involve a violation of
any applicable federal or state securities law, and the Corporation hereby agrees to make
reasonable efforts to comply with any applicable state securities law. If the Ohio Securities Act
shall be applicable to this option, it shall not be exercisable unless under said Act at the time
of exercise the shares of Common Stock or other securities purchasable hereunder are

9

 

exempt, are the subject matter of an exempt transaction, are registered by description or by
qualification, or at such time are the subject matter of a transaction which has been registered by
description.

     10. Adjustments.

          In the event of any change in the aggregate number of outstanding Common Shares by reason of
(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, spin-out,
split-off, split-up, reorganization, partial or complete liquidation of the Corporation or other
distribution of assets, issuance of rights or warrants to purchase securities of the Corporation,
or (c) any other corporate transaction or event having an effect similar to any of the foregoing,
then the Committee shall adjust the number of SARs covered by this Agreement and the Base Price in
such manner as may be appropriate to prevent the dilution or enlargement of the rights of the
Grantee that would otherwise result from such event.

     11. Withholding Taxes.

          To the extent that the Corporation is required to withhold federal, state, local or foreign
taxes in connection with the exercise of the SARs, and the amounts available to the Corporation for
such withholding are insufficient, it shall be a condition to such exercise that the Grantee make
arrangements satisfactory to the Corporation for payment of the balance of such taxes required to
be withheld. The Grantee may elect that all or any part of such withholding requirement be
satisfied by retention by the Corporation of a portion of the Common Shares to be delivered to the
Grantee. If such election is made, the shares so retained shall be credited against such
withholding requirement at the Market Value per Share on the date of such exercise. 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.

     12. 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.

     13. No Employment Contract; Right to Terminate Employment.

          The grant of the SARs under this Agreement to the Grantee is a voluntary, discretionary award
being made on a one-time basis and it does not constitute a commitment to make any future awards.
The grant of the SARs and any payments made hereunder will not be considered salary or other
compensation for purposes of any severance pay or similar allowance, except as otherwise required
by law. Nothing in this Agreement will give the Grantee any right to continue employment with the
Corporation or any Subsidiary, as the case may be, or interfere in any way with the right of the
Corporation or a Subsidiary to terminate the employment of the Grantee at any time.

10

 

     14. Relation to Other Benefits.

          Any economic or other benefit to the Grantee under this Agreement or the Plan shall not be
taken into account in determining any benefits to which the Grantee may be entitled under any
profit-sharing, retirement or other benefit or compensation plan maintained by the Corporation or a
Subsidiary and shall not affect the amount of any life insurance coverage available to any
beneficiary under any life insurance plan covering employees of the Corporation or a Subsidiary.

     15. Information.

          Information about the Grantee and the Grantee’s participation in the Plan may be collected,
recorded and held, used and disclosed for any purpose related to the administration of the Plan.
The Grantee understands that such processing of this information may need to be carried out by the
Corporation and its Subsidiaries and by third party administrators whether such persons are located
within the Grantee’s country or elsewhere, including the United States of America. The Grantee
consents to the processing of information relating to the Grantee and the Grantee’s participation
in the Plan in any one or more of the ways referred to above.

     16. 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 respect to the SARs without the Grantee’s consent.

     17. 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.

     18. Governing Law.

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

     The undersigned hereby acknowledges receipt of an executed original of this Appreciation
Rights Agreement and accepts the Appreciation Rights granted thereunder on the terms and conditions
set forth herein and in the Plan.

	 	 	 	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 

[GRANTEE NAME]
	 	 

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          Executed in the name and on behalf of the Corporation at Cleveland, Ohio as of the 22nd day of
February 2008.

	 	 	 	 	 
	 	BRUSH ENGINEERED MATERIALS 

INC.

 	 
	 	By:  	 	 
	 	 	Michael C. Hasychak 	 
	 	 	Vice President, Treasurer and Secretary 	 
	 

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