Exhibit 10.1
BRUSH ENGINEERED MATERIALS INC. and
SUBSIDIARIES
MANAGEMENT PERFORMANCE COMPENSATION PLAN
2009 PLAN YEAR
(as adopted February,
2009)
I.
INTRODUCTION
The Management Performance Compensation Plan (“the
Plan”) provides incentive compensation to eligible employees
based principally on annual financial performance. Plan awards have
a significant portion based on Company and/or Business Unit
performance (“financial performance”), a component that
recognizes individual and combined contributions toward
personal/team objectives (“Personal/Team Performance”),
and, for some participants, a “relative” company peer
group financial measure.
II.
DEFINITIONS
Plan Year:
The fiscal year for which the Company’s Business Unit
performance, and any Plan awards are calculated.
Business Unit
Performance:
The Executive Staff will designate the Business Units/Subsidiaries
that are eligible for participation in the Plan for the Plan
Year.
Each business unit has defined
financial performance measures, which have in turn been approved by
the Compensation Committee of the Board and/or the Executive Staff.
These measures are expressed as a Minimum, Target and Maximum. Plan
Awards include a “Financial Performance Component”
based on the Business Unit performance.
Personal/Team
Performance:
An assessment is made of an individual’s achievements and
his/her contributions to work/project teams during the Plan Year.
This assessment is expressed as a percentage of base compensation.
The “Personal/Team Performance” component is distinct
from the “Financial Performance” component.
Profit or loss, before interest
and taxes, and for domestic and international operations. Operating
Profit will include any special write-off or accounting charge and
accrued performance or incentive compensation.
Peer Group Return on Invested
Capital (ROIC)
The publicly available return on invested capital change for those
peer group companies included in the Company’s self-declared
peer group in comparison to the Company. Due to the delays in
reported information, the measurement period will include the
fourth quarter of the prior year as well as the first three
quarters of the current plan year. This “relative”
company peer group financial measure is an independent measure and
is not influenced by any other financial performance measure set by
the Company for the plan year.
Working Capital:
This is a monthly calculation based on Business Unit/Subsidiary
worldwide accounts receivable and FIFO inventory divided by
annualized worldwide sales (current month plus prior two months
annualized). The result being working capital as a percent of
sales. At the end of the year the average of the twelve monthly,
annualized sales numbers and twelve monthly working capital numbers
(A/R and inventory) are calculated and a percent to sales is
calculated based on the averages for the twelve periods. This
twelve-month average is the basis for the incentive metric for
working capital management.
Other Metrics:
From time to time, other metrics will be adopted that are aligned
with a Business Unit’s strategy and market challenges. These
metrics will be defined and tracked by the corporate accounting
department, subject to approval by the Executive Staff.
Base Compensation:
The participant’s annual base salary in effect on
September 30 of the Plan Year.
III.
PARTICIPATION
At the beginning of the Plan Year, the Executive Staff will
identify exempt, salaried employees whose responsibilities affect
progress on critical issues facing the Company. Those individuals
selected by the Executive Staff will be notified of their
participation in the Plan, their performance compensation grade and
performance compensation opportunity, and their applicable Business
Unit designation.
Following the beginning of the
Plan Year, t
