BRUSH ENGINEERED MATERIALS INC.
AMENDED AND RESTATED EXECUTIVE DEFERRED COMPENSATION PLAN
II
The Brush
Engineered Materials Inc. Executive Deferred Compensation Plan II
(the “Plan”), adopted by the Board on December 7,
2004, for years beginning after December 31, 2004, is
maintained for the purpose of providing deferred compensation to
eligible employees, which plan is intended to be a non-qualified
deferred compensation arrangement for a select group of management
and highly compensated employees. Effective January 1, 2008,
the Plan is amended and restated in the form of this Amended and
Restated Executive Deferred Compensation Plan II to provide as
follows:
The following
terms shall have the following meanings described in this Article
unless the context clearly indicates another meaning. All
references in the Plan to specific Articles or Sections shall refer
to Articles or Sections of the Plan unless otherwise
stated.
2.1 Account
means the record or records established for each Participant in
accordance with Section 5.1.
2.2 Annual
Excess Compensation means for a Plan Year a Participant’s
Base Salary for services performed during the Plan Year,
performance compensation payable in the Plan Year under the Brush
Engineered Materials Inc. and Subsidiaries Management Performance
Compensation Plan, and incentive compensation payable in cash and
cash equivalents in the Plan Year under the Brush Engineered
Materials Inc. and Subsidiaries Long-Term Incentive Plan, whether
or not such compensation is reportable on Form W-2 for the Plan
Year, but only to the extent that such compensation exceeds the
limit imposed on compensation taken into account under the Brush
Engineered Materials Inc. Savings and Investment Plan by reason of
Code Section 401(a)(17) as determined by the Plan
Administrator.
2.3 Base
Salary means for a Plan Year the annual cash compensation
relating to services performed during such Plan Year, whether or
not paid in such Plan Year or included on the Federal Income Tax
Form W-2 for such year, excluding bonuses, commissions, overtime,
special awards, tax planning stipends, fringe benefits, stock
options, relocation expenses, incentive payments, non-monetary
awards, fees, and automobile and other allowances paid to a
Participant for employment services rendered (whether or not such
allowances are included in the Employee’s gross income). Base
Salary shall be calculated before reduction for compensation
voluntarily deferred or contributed by the Participant pursuant to
all qualified or non-qualified plans of any Employer and shall be
calculated to include amounts not otherwise included in the
Participant’s gross income under Code Sections 125,
402(e)(3), 402(h), or 403(b) pursuant to plans established by any
Employer; provided, however, that all such amounts will
be
included in
compensation only to the extent that, had there been no such plan,
the amount would have been payable in cash to the
Employee.
2.4 Board
means the Board of Directors of Company.
2.5 Bonus
means for a Plan Year any compensation payable in the form of cash
to a Participant with respect to the Plan Year pursuant to the
Brush Engineered Materials Inc. and Subsidiaries Management
Performance Compensation Plan, whether or not paid in a calendar
year or included on the Federal Income Tax Form W-2 for a calendar
year.
2.6 Code
means the Internal Revenue Code of 1986, as amended.
2.7 Company
means Brush Engineered Materials Inc., an Ohio
corporation.
2.8
Compensation Committee means the Compensation Committee of
the Board or, at any time that no such committee exists, the
Board.
2.9 Deferred
Compensation means the portion of a Participant’s Base
Salary or Bonus allocated to the Participant’s Account in
accordance with Section 4.1.
2.10 Election
Agreement means the written agreement entered into by an
Employee, which shall be irrevocable, pursuant to which the
Employee becomes a Participant in the Plan and makes an election
relating to Deferred Compensation and the period over which
Deferred Compensation and Nonelective Deferred Compensation and
investment return thereon will be paid.
2.11
Employee means, with respect to each Employer, management
and highly compensated employees.
2.12
Employer means the Company and any other corporation in a
controlled group of corporations (under Code Section 414(b))
of which Company is a member which, with the authorization of the
Board, adopts the Plan for the benefit of its employees pursuant to
resolution of its board of directors.
2.13
Nonelective Deferred Compensation means a
Participant’s nonelective deferred compensation allocated to
the Participant’s Account in accordance with
Section 5.1.
2.14
Participant means an Employee or former Employee of an
Employer who has met the requirements for participation under
Section 3.1 and who is or may become eligible to receive a
benefit from the Plan or whose beneficiary may be eligible to
receive a benefit from the Plan.
2.15 Plan
means the plan, the terms and provisions of which are herein set
forth, and as it may be amended or restated from time to time,
designated as the “Brush Engineered Materials Inc. Executive
Deferred Compensation Plan II.”
2.16 Plan
Administrator means the Company.
2.17 Plan
Year means the period beginning on January 1 and ending on
December 31 of each year.
2.18 Separation
from Service means a termination of employment with the Company
and all entities with which the Company would be considered a
single employer under Section 414(b) and 414(c) of the Code in a
manner such as to constitute a separation from service as defined
under Section 409A of the Code; provided that in applying
Section 1563(a)(1), (2), and (3) for purposes of
determining a controlled group of corporations under Section 414(b)
of the Code, the language “at least 50 percent” is
used instead of “at least 80 percent” each place
it appears in Section 1563(a)(1), (2), and (3), and in applying
Treasury Regulation Section 1.414(c)-2 for purposes of
determining trades or businesses (whether or not incorporated) that
are under common control for purposes of Section 414(c),
“at least 50 percent” is used instead of “at
least 80 percent” each place it appears in that
regulation.
2.19 Trust
means any domestic trust that may be maintained in the United
States pursuant to Article 8.
2.20 Valuation
Date means the last business day of each calendar
month.
3.1
Eligibility . An Employee shall be eligible to participate
in the Plan if he or she is an Employee designated as eligible by
the Compensation Committee. Individuals not specifically designated
by the Compensation Committee are not eligible to participate in
the Plan.
3.2
Participation . An Employee shall become a Participant as of
the date he or she satisfies the eligibility requirements of
Section 3.1 and completes all administrative forms required by
the Plan Administrator. A Participant’s participation in the
Plan shall terminate upon Separation from Service or upon such
other events as determined by the Compensation
Committee.
4.1 Deferred
Compensation . Subject to any limitations established by the
Compensation Committee or the Plan Administrator, a Participant may
elect for a Plan Year to have his or her Base Salary and/or Bonus
deferred in any amount not to exceed (i) the
Participant’s Base Salary in excess of the dollar limitation
provided for under Code Section 401(a)(17) as determined by
the Plan Administrator, except that this dollar limitation will not
be applied with respect to the 2005 Plan Year, and (ii) the
Participant’s full Bonus, less applicable tax withholding,
and to have that amount credited to his or her Account as Deferred
Compensation. Deferred Compensation shall be credited to a
Participant’s Account monthly.
4.2 Nonelective
Deferred Compensation . There shall be credited to each
Participant’s Account for each Plan Year an amount equal to
three percent of his or her Annual Excess Compensation, or such
other percent as may be established from time to time by action of
the Board to maintain parity with the matching contribution rate
available under the Brush Engineered Materials Inc. Savings and
Investment Plan. Moreover, the Compensation Committee may in its
discretion determine for any Plan Year to make an additional credit
to a Participant’s Account as Nonelective Deferred
Compensation, which amount may be a different amount or percentage
(including no amount) for each Participant, as the
Compensation
Committee shall
in its sole and absolute discretion determine. Nonelective Deferred
Compensation shall be credited to a Participant’s Account
monthly.
4.3 Election
Procedures .
(a) Except as
provided in paragraphs (b) and (c) below, compensation
for services performed during a taxable year may be deferred at the
Participant’s election only if the election to defer such
compensation is made not later than the close of the preceding
taxable year.
(b) In the case of
the first year in which a Participant becomes eligible to
participate in the Plan, the Participant’s election with
respect to amounts deferred pursuant to Sections 4.1 and 4.2
may be made with respect to services to be performed subsequent to
the election within 30 days after the date the Participant
becomes eligible to participate in the Plan. Except as provided in
paragraph (c) below, when an election to defer is made in the
first year of eligibility but after commencement of a performance
period during which compensation is earned under an incentive plan,
the deferral election shall apply only to that portion of such
compensation earned under the incentive plan for such performance
period equal to the total amount of the incentive compensation
earned during such performance period multiplied by a fraction, the
numerator of which is the number of days beginning on the day
immediately after the day the election to defer becomes irrevocable
and ending on the last day of the performance period, and the
denominator of which is the total number of days in the performance
period.
(c) In the case of
any performance-based compensation based on services performed over
a period of at least 12 months as determined by the Plan
Administrator in accordance with regulatory guidance under Code
Section 409A, an election may be made no later than six months
before the end of the period.
(d) Each
Participant shall specify on his or her Election Agreement with
respect to each Plan Year (i) the percentage of Base Salary
and/or the percentage of Bonus the Participant elects to defer for
such Plan Year; and (ii) whether the Deferred Compensation and
Nonelective Deferred Compensation for such Plan Year plus
investment return credited to such amounts will be paid in a single
lump sum, annual installments payable over three years, or annual
installments payable over five years upon the Participant’s
Separation from Service; subject to the further provisions of
Article 6.
(e) A Participant
can change his or her Election Agreement and an eligible Employee
who is not a Participant may become a Participant, as of any
January 1 by completing, signing, and filing an Election Agreement
with the Plan Administrator not later than the preceding
December 31 (subject, however, to the provisions of paragraph
(b) above in the case of a Participant who becomes newly
eligible during the Plan Year). A Participant who does not complete
a new Election Agreement for a Plan Year will be deemed to have
elected not to have any Deferred Compensation for the Plan Year and
will be deemed to have elected a single lump sum method of payment
for any Nonelective Deferral Compensation for such Plan Year. In
the event any amount is credited to the Account of Participant with
respect to which no timely election concerning method of payment
has been made, such amount shall be payable in the single lump sum
method of payment.
(f) All Election
Agreements shall be in a form acceptable to the Plan Administrator
and shall be completed, signed,
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