UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

FORM 10-K

(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the fiscal year ended December 31, 1999

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from to
----------- ------------

Commission file number 1-7006
BRUSH WELLMAN INC.
(Exact name of Registrant as specified in charter)

OHIO 34-0119320
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

17876 ST. CLAIR AVENUE, CLEVELAND, OHIO 44110
(Address of principal executive offices) (Zip Code)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE 216-486-4200

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
------------------- -----------------------------------------

Common Stock, par value $1 per share New York Stock Exchange

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

None

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

The aggregate market value of Common Stock, par value $1 per share, held by
non-affiliates of the registrant (based upon the closing sale price on the New
York Stock Exchange) on March 6, 2000 was approximately $251,656,185.

As of March 6, 2000, there were 16,332,758 shares of Common Stock, par
value $1 per share, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the proxy statement for the annual meeting of shareholders to
be held on May 2, 2000 are incorporated by reference into Part III.
2

BRUSH WELLMAN INC.

FORM 10-K ANNUAL REPORT
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999

TABLE OF CONTENTS

ITEM NO. PAGE NO.
-------- --------

PART I
1. Business.................................................... 1
2. Properties.................................................. 3
3. Legal Proceedings........................................... 5
4. Submission of Matters to a Vote of Security Holders......... 7
4A. Executive Officers of the Registrant........................ 7

PART II
5. Market for the Registrant's Common Stock and Related
Security Holder Matters..................................... 9
6. Selected Financial Data..................................... 9
7. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................... 9
7A. Quantitative and Qualitative Disclosure about Market Risk... 19
8. Financial Statements and Supplementary Data................. 20
9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.................................... 20

PART III
Part III information will appear in the Registrant's Proxy
Statement in connection with its 2000 Annual Meeting of
Shareholders. Such Proxy Statement will be filed with the
Securities and Exchange Commission pursuant to Regulation
14A and such information will be incorporated herein by
reference as of the date of such filing..................... 21

PART IV
14. Exhibits, Financial Statement Schedules, and Reports on Form
8-K......................................................... 22

SIGNATURES ............................................................ 27

SCHEDULES
II Valuation and Qualifying Accounts........................ 28
Consolidated Financial Statements........................... F-1
Selected Financial Data..................................... F-27

PART I

Portions of the narrative set forth in this document that are not
historical in nature are forward-looking statements. Brush Wellman Inc.'s (the
"Company") actual future performance may differ from that contemplated by the
forward-looking statements as a result of a variety of factors. These factors
include, in addition to those mentioned elsewhere herein, the condition of the
markets which the Company serves (especially as impacted by events in particular
markets including telecommunications, automotive, and computer, or in particular
geographic regions, such as Asia), the success of the Company's strategic plans,
the timely and successful completion of pending capital expansions, and the
outcome of pending litigation matters.

ITEM 1. BUSINESS

Brush Wellman Inc. is a leading international producer and supplier of
high-performance engineered materials and is the only fully-integrated producer
of beryllium, beryllium-containing alloys and beryllia ceramic in the world. In
addition the Company produces Engineered Material Systems and precious metal and
specialty alloy products. As of December 31, 1999 the Company had 2,257
employees.

The Company operates two primary business groups, the Metal Systems Group
and the Microelectronics Group. Corporate and certain unallocated costs,
non-operating items of other income and expense, and the revenues and related
costs from one manufacturing facility are included in All Other. As of December
31, 1999 the All Other group had 193 employees.

METAL SYSTEMS GROUP

The Metals Systems Group is comprised of Alloy Products (primarily copper
beryllium), Beryllium Products and Engineered Materials Systems (produced by the
Company's wholly-owned subsidiary, Technical Materials, Inc. (TMI)). In 1999,
67% of the Company's sales were from this segment (72% in 1998 and 70% in 1997).
As of December 31, 1999 the Metal Systems Group had 1,544 employees.

Alloy Products are metallurgically tailored to meet specific customer
performance requirements. Copper beryllium alloys exhibit high electrical and
thermal conductivities, high strength and hardness, good formability and
excellent resistance to corrosion wear and fatigue. These alloys, sold in strip
and bulk form, are ideal choices for demanding applications in computers,
telecommunications, automotive electronics, aerospace, oil exploration, undersea
fiber optic cables, and plastic mold tooling.

Beryllium Products include beryllium, AlBeMet(R), AlBeCast(R) and
E-materials. Beryllium is a lightweight metal possessing unique mechanical and
thermal properties. Its specific stiffness is much greater than other engineered
structured materials such as aluminum, titanium and steel. Beryllium is
extracted from both bertrandite and imported beryl ore. The Company holds
extensive mineral rights and mines the bertrandite in central Utah. Beryllium
products are used in a variety of high-performance applications, primarily, but
not exclusively, in defense and aerospace markets.

Beryllium-containing products are sold in competitive markets throughout
the world through a direct sales organization and through company owned and
independent distribution centers. NGK Metals Corporation of Reading,
Pennsylvania and NGK Insulators, Ltd. of Nagoya, Japan compete with the Company
in the beryllium alloys field. Beryllium alloys also compete with other
generally less expensive materials, including phosphor bronze, stainless steel
and other specialty copper and nickel alloys. While the Company is the only
domestic producer of the metal beryllium, it competes with other fabricators as
well as with designs utilizing other materials.

Engineered Materials Systems, manufactured by TMI, are combinations of
precious and non-precious metals in continuous strip form, and are used in
complex electronic and electrical components in telecommunications systems,
automobiles and computers. Divisions of Cookson, Metallon and several European
manufacturers are competitors for the sale of inlaid strip. Strip with selective
electroplating is a competitive alternative as are other design approaches.
TMI's products are sold directly and through its sales representatives.

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METAL SYSTEMS GROUP -- SALES AND BACKLOG

The backlog of unshipped orders as of December 31, 1999, 1998 and 1997 was
$91,844,000, $81,199,000 and $78,662,000, respectively. Backlog is generally
represented by purchase orders that may be terminated under certain conditions.
The Company expects that, based on recent experience, substantially all of its
backlog of orders for this segment at December 31, 1999 will be filled during
2000.

Sales are made to approximately 3,600 customers. Government sales,
principally subcontracts, accounted for about 2.0% of Metal Systems Group sales
in 1999 as compared to 2.4% in 1998 and 1.6% in 1997. Sales outside the United
States, principally to Western Europe, Canada and Asia, accounted for
approximately 34% of Metal Systems Group sales in 1999, 35% in 1998 and 34% in
1997. Other segment reporting and geographic information is set forth in Note N
to the Consolidated Financial Statements and in Item 7 -- "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

METAL SYSTEMS GROUP -- RESEARCH AND DEVELOPMENT

Active research and development programs seek new product compositions and
designs as well as process innovations. Expenditures for research and
development amounted to $6,799,000 in 1999, $6,628,000 in 1998 and $5,531,000 in
1997. A staff of 41 scientists, engineers and technicians was employed in this
effort during 1999. Some research and development projects were externally
sponsored. Expenditures related to those externally sponsored projects were not
material in 1999, 1998 and 1997 and are excluded from the above totals.

MICROELECTRONICS GROUP

The Microelectronics Group is comprised of Williams Advanced Materials Inc.
(WAM), a wholly-owned subsidiary of the Company, and Electronic Products
(formerly Ceramics). In 1999, 31% of the Company's sales were from this segment
(26% in 1998 and 29% in 1997). As of December 31, 1999 the Microelectronics
Group had 520 employees.

WAM manufactures and fabricates precious metal and specialty metal products
for the hybrid microelectronics, semiconductors, optical media, electron tube,
magnetic head including MR and GMR materials, crystal, aerospace, and
performance film industries. WAM's major product lines include vapor deposition
materials, high-temperature braze materials, clad and precious metal preforms,
ultra fine wire, sealing lids for the semiconductor/hybrid markets and
restorative dental alloys.

WAM's principal competition includes companies such as Sumitomo Metals,
Tanaka Metals, Johnson Matthey, Engelhard, and a number of smaller regional or
national suppliers. WAM's products are sold directly from WAM's facilities in
Buffalo, New York and Singapore as well as through direct sales offices and
independent sales representatives throughout the world.

Electronic Products manufactures beryllia ceramics, powder metallurgy,
thick film metalization and component assemblies. These products are used in
wireless communications, automotive, medical and aerospace applications. CBL
Ltd. is a competitor in beryllia ceramic. Other competitive materials include
alumina, aluminum nitride and composites.

MICROELECTRONICS GROUP -- SALES AND BACKLOG

The backlog of unshipped orders as of December 31, 1999, 1998 and 1997 was
$20,283,000, $11,606,000 and $15,292,000, respectively. Backlog is generally
represented by purchase orders that may be terminated under certain conditions.
The Company expects that, based on recent experience, substantially all of its
backlog of orders for this segment at December 31, 1999 will be filled during
2000.

Sales are made to approximately 1,300 customers. Government sales,
principally subcontracts, accounted for less than 0.1% of Microelectronics Group
sales in 1999, 1998 and 1997. Sales outside the United States, principally to
Western Europe, Canada and Asia, accounted for approximately 23% of
Microelectronics Group sales in 1999, 25% in 1998 and 32% in 1997. Other segment
reporting and geographic information is set forth

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in Note N to the Consolidated Financial Statements and in Item
7 -- "Management's Discussion and Analysis of Financial Condition and Results of
Operations."

MICROELECTRONICS GROUP -- RESEARCH AND DEVELOPMENT

Active research and development programs seek new product compositions and
designs as well as process innovations. Expenditures for research and
development amounted to $1,707,000 in 1999, $2,037,000 in 1998 and $2,176,000 in
1997. A staff of 14 scientists, engineers and technicians was employed in this
effort during 1999.

GENERAL

AVAILABILITY OF RAW MATERIALS

The more important raw materials used by the Company are beryllium
(extracted from both imported beryl ore and bertrandite mined from the Company's
Utah properties), copper, gold, silver, nickel, platinum and palladium. The
availability of these raw materials, as well as other materials used by the
Company, is adequate and generally not dependent on any one supplier. Certain
items are supplied by a preferred single source, but alternatives are believed
readily available.

PATENTS AND LICENSES

The Company owns patents, patent applications and licenses relating to
certain of its products and processes. While the Company's rights under the
patents and licenses are of some importance to its operations, the Company's
businesses are not materially dependent on any one patent or license or on the
patents and licenses as a group.

REGULATORY MATTERS

The Company is subject to a variety of laws including those which regulate
the use, handling, treatment, storage, discharge and disposal of substances and
hazardous wastes used or generated in the Company's manufacturing processes. The
inhalation of airborne beryllium particulate may present a health hazard to
certain individuals. For decades the Company has operated its beryllium
facilities under stringent standards of inplant and outplant discharge. These
standards, which were first established by the Atomic Energy Commission over
forty years ago, were, in general, substantially adopted by the United States
Environmental Protection Agency (the "U.S. EPA") and the Occupational Safety and
Health Administration ("OSHA"). The Government has continued to review these
standards, and governmental agencies continue to debate their adequacy. The
Department of Energy has proposed chronic beryllium disease preventive
regulations for occupational exposure to beryllium at Department of Energy
facilities. The Company continues to be the subject of media coverage concerning
the beryllium industry and chronic beryllium disease. These reports, and others
similar to them, may exacerbate the regulatory and litigation environment in
which the Company operates.

ITEM 2. PROPERTIES

The material properties of the Company, all of which are owned in fee
except as otherwise indicated, are as follows:

MANUFACTURING FACILITIES

BREWSTER, NEW YORK -- A 35,000 square foot facility on a 6.0 acre site for
manufacturing services relating to non-precious metals.

BUFFALO, NEW YORK -- A complex of approximately 97,000 square feet on a 3.8
acre site providing facilities for manufacturing, refining and laboratory
services relating to high purity precious metals.

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6

DELTA, UTAH -- An ore extraction plant consisting of 86,000 square feet of
buildings and large outdoor facilities situated on a two square mile site. This
plant extracts beryllium from bertrandite ore from the Company's mines as well
as from imported beryl ore.

ELMORE, OHIO -- A complex containing approximately 856,000 square feet of
building space on a 439 acre plant site. This facility employs diverse chemical,
metallurgical and metalworking processes in the production of beryllium,
beryllium oxide, beryllium alloys and related products. Beryllium ore
concentrate from the Delta, Utah plant is used in all beryllium-containing
products.

FREMONT, CALIFORNIA -- A 16,800 square foot leased facility for the
fabrication of precision electron beam welded, brazed and diffusion bonded
beryllium structures.

JUAB COUNTY, UTAH -- The Company holds extensive mineral rights in Juab
County, Utah from which the beryllium bearing ore, bertrandite, is mined by the
open pit method. A substantial portion of these rights is held under lease. Ore
reserve data is set forth on page 18.

LINCOLN, RHODE ISLAND -- A manufacturing facility consisting of 124,000
square feet located on seven and one-half acres. This facility produces
reel-to-reel strip metal products which combine precious and non-precious metals
in continuous strip form and related metal systems products.

LORAIN, OHIO -- A manufacturing facility consisting of 55,000 square feet
located on 15 acres. This facility produces metal alloys in electronic induction
furnaces which are continually cast into bar stock and heat treated.

NEWBURYPORT, MASSACHUSETTS -- A 30,000 square foot manufacturing facility
on a four acre site that produces alumina, beryllia ceramic and direct bond
copper products.

OCEANSIDE, CALIFORNIA -- A 12,000 square foot leased facility on .75 acres
of leased land. Over two-thirds of the facility is comprised of clean rooms
which meet the Mil. Stds. 209D requirements, for the production of thick-film
circuits and other complex circuits.

SHOEMAKERSVILLE (READING), PENNSYLVANIA -- A 123,000 square foot plant on a
ten acre site that produces thin precision strips of beryllium copper and other
alloys and beryllium copper rod and wire.

TUCSON, ARIZONA -- A 63,000 square foot plant on a ten acre site for the
manufacture of beryllia ceramic parts from beryllium oxide powder supplied by
the Elmore, Ohio facility and for the manufacture of metal matrix composites.

WHEATFIELD, NEW YORK -- A 29,000 square foot facility on a 10.2 acre site
for manufacturing services relating to braze material and specialty alloys.

RESEARCH FACILITIES AND ADMINISTRATIVE OFFICES

CLEVELAND, OHIO -- A structure containing 110,000 square feet on an 18 acre
site housing corporate and administrative offices, data processing and research
and development facilities.

SERVICE AND DISTRIBUTION CENTERS

ELMHURST, ILLINOIS -- A 28,500 square foot leased facility principally for
distribution of beryllium alloys.

FAIRFIELD, NEW JERSEY -- A 24,500 square foot leased facility principally
for distribution of beryllium alloys.

FUKAYA, JAPAN -- A 35,500 square foot facility on 1.8 acres of land in
Saitama Prefecture principally for distribution of beryllium alloys.

SINGAPORE -- A 4,500 square foot leased facility for the assembly and sale
of precious metal hermetic sealing lids.

STUTTGART, WEST GERMANY -- A 24,750 square foot leased facility principally
for distribution of beryllium alloys.
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THEALE (READING), ENGLAND -- A 19,700 square foot leased facility
principally for distribution of beryllium alloys.

TORRANCE, CALIFORNIA -- A 20,000 square foot leased facility principally
for distribution of beryllium alloys.

WARREN, MICHIGAN -- A 34,500 square foot leased facility principally for
distribution of beryllium alloys.

Production capacity, except in the case of Alloy Products, is believed to
be adequate to fill the Company's backlog of orders and to meet the current
level of demand. In May 1996, the Board of Directors approved a plan for a major
expansion and upgrading of alloy casting and strip capabilities involving the
investment of $117 million at the Company's Elmore, Ohio facility. The goal of
this investment is to increase strip production capacity, reduce production
costs, improve quality, reduce delivery lead times, and improve working capital
utilization. The plant became fully operational during 1999, but was unable to
produce the desired output on a consistent and reliable basis. During the third
quarter of 1999 the Company retained the services of approximately 50 outside
engineers and skilled trades to focus on the alloy expansion equipment
reliability issues. Except for one minor task, this project has been
successfully completed. The Company anticipates that output should improve in
2000.

ITEM 3. LEGAL PROCEEDINGS

The Company is subject, from time to time, to a variety of civil and
administrative proceedings arising out of its normal operations, including,
without limitation, product liability claims, health, safety and environmental
claims and employment-related actions. Among such proceedings are the cases
described below.

CBD CLAIMS

There are claims pending in various state and federal courts against the
Company by employees, former employees or surviving spouses and third party
individuals alleging that they contracted chronic beryllium disease ("CBD") or
related ailments as a result of exposure to beryllium. Plaintiffs in CBD cases
seek recovery under theories of intentional tort and various other legal
theories and seek compensatory and punitive damages, in many cases of an
unspecified sum. Spouses, if any, claim loss of consortium.

During 1999, the number of CBD cases grew from 19 (involving 95
plaintiffs), as of December 31, 1998, to 37 cases (involving 119 plaintiffs), as
of December 31, 1999. During 1999, an aggregate of two cases involving four
plaintiffs were settled. The Company received favorable summary judgments in two
cases, which have been appealed by the plaintiffs. No other CBD cases were
dismissed in 1999.

As of December 31, 1999, the Company had an aggregate of 23 "employee
cases" involving an aggregate of 23 employees, former employees or surviving
spouses (in 14 of these cases, a spouse has also filed claims as part of their
spouse's case). The other 14 cases involve third party individual plaintiffs,
with 49 individuals (and 33 spouses who have filed claims as part of their
spouse's case). Employee cases, in which plaintiffs have a high burden of proof,
have historically involved relatively small losses to the Company. Third party
plaintiffs (typically employees of our customers) face a lower burden of proof
than do our employees, but these cases are generally covered by insurance.

From January 1, 2000 through March 23, 2000, eight additional CBD claims
were filed against the Company. Of these, four claims (eight plaintiffs) were
employee cases and three cases (ten plaintiffs) were filed by third party
non-employee plaintiffs. In general, each asserts the same types of claims and
seek the same damages under the same theories as discussed above for the year
ended 1999.

In addition, on February 14, 2000, seven plaintiffs filed a purported class
action lawsuit against the Company in the Court of Common Pleas, Cuyahoga
County, Ohio, claiming that they were exposed to hazardous levels of airborne
beryllium while working in the Company's Elmore facility as tradesmen employed
by independent contractors. Plaintiffs purport to sue on behalf of a class of
all workers who were members of unions comprising the Northwestern Ohio Building
and Construction Trades Council and who worked in the Elmore plant from 1953 to
December 31, 1999. They assert claims for negligence, strict liability,
statutory

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product liability, "ultrahazardous activities" and punitive damages, and seek
establishment of a fund for medical surveillance and screening. The Company has
filed a motion to dismiss the class action, which is pending.

The Company has settled the following previously reported lawsuits:

- State Compensation Fund v. Brush Wellman Inc. The Fund's declaratory
judgment action was dismissed with prejudice following the Company's
agreement not to seek defense or indemnity from the Fund for the claims
made in some CBD cases. Because these claims relate to employees, for
whom the burden of proof is high, the absence of defense or indemnity is
not expected to have a material impact on the Company's liability for CBD
claims.

- Wallace et al. v. Brush Wellman et al. This action was settled in 1998
and settlement funds paid in early 1999 ended this action. The settlement
was fully insured.

- Thomas Markham et al. v. Brush Wellman Inc. et al. This action has been
settled by the Company for $25,000, and the release was executed on June
25, 1999.

- Corvino et ux. v. Cabot Corp. et al. The action was settled and dismissed
during 1999. The settlement was fully insured.

ENVIRONMENTAL CLAIMS

The Company was identified as one of the Potentially Responsible Persons
(the "PRPs") under the Comprehensive, Environmental, Response, Compensation and
Liability Act ("CERCLA") at the Spectron Superfund Site in Elkton, Maryland. The
Company reached a settlement with the U.S. Environmental Protection Agency (the
"U.S. EPA") resolving the Company's liability under the Administrative Orders by
Consent dated August 21, 1989 and October 1, 1991. The cost of compliance with
the terms of these Orders is approximately $8,480,000, of which the Company's
proportionate share is $20,461. On September 29, 1995, the U.S. EPA sent a
"Special Notice for Negotiations for Remedial Investigation/Feasibility Study"
to approximately 700 PRPs, including the Company. The U.S. EPA estimates that
the final remedy for the Elkton Site will cost in the aggregate approximately
$45 million. In October 1995, the terms of several proposed de minimis
settlement/buyout options designed to resolve all remaining liability with
respect to the Elkton Site were circulated among a group of PRPs, including the
Company. The Company indicated its willingness to pursue resolution of its
liability through a de minimis settlement/buyout. No litigation has been
initiated by the U.S. EPA with respect to this matter. In 1998, the Company
received information from the group of PRPs negotiating the terms of the de
minimis settlement with the U.S. EPA that the U.S. EPA is in the process of
reviewing the allocation information underpinning the terms of the proposed
settlement. Originally, the U.S. EPA expected to complete its review in a
relatively short amount of time and consummate the settlement before the 1998
year end. The Company, however, has received no new information concerning when
the U.S. EPA expects to complete its review and finalize the settlement.

The Company has settled the following previously reported environmental
proceedings:

- In the previously reported case of Glidden Company et al. v. American
Color and Chemical et al., the Company reached a settlement agreement
with the plaintiffs in October 1999, in which the Company has agreed to
pay $70,000.

- In the previously reported case of United States of America v. Berks
Associates Inc. et al. v. Aamco Transmissions et al., the Company
participated in a court-ordered settlement proceeding, which resulted in
a de minimis settlement payment by the Company of approximately $15,000.

- In the previously reported claim by the U.S. EPA notifying Egbert Corp.,
a subsidiary of the Company ("Egbert"), that it was a PRP under CERCLA
for the PCB Treatment Site in Kansas City, Kansas and Kansas City,
Missouri, the Company has entered into a settlement, for approximately
$19,000, with the PRP group responsible for remedying this site, which
has covenanted not to sue the Company and to indemnify the Company for
certain covered matters.

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- In the previously reported claim by the U.S. EPA notifying the Company
that it was a PRP under CERCLA for the remediation of the Casmalia
Resources Hazardous Waste Management Facility, the Company has entered
into a settlement with the U.S. EPA for approximately $80,000.

OTHER CLAIMS

The Company's Egbert subsidiary has been named as a defendant in a number
of lawsuits alleging asbestos-induced illness, arising out of the conduct of a
friction materials business whose operating assets Egbert sold in 1986. In each
of the pending cases, Egbert is one of a large number of defendants named in the
respective complaints. Egbert is a party to an agreement with the predecessor
owner of its operating assets, Pneumo Abex Corporation (formerly Abex
Corporation), and five insurers, regarding the handling of these cases. Under
the agreement, the insurers share some expenses of defense, and Egbert, Pneumo
Abex Corporation and the insurers share payment of settlements and/or judgments.
In each of the pending cases, both expenses of defense and payment of
settlements and/or judgments are subject to a limited, separate reimbursement
agreement under which a successor owner of the business is obligated. A number
of cases of this type have been disposed of to date, some by voluntary
dismissal, others by summary judgment, one by jury verdict of no liability, and
still others upon payment of nominal amounts in settlement. There are at present
12 cases pending.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT

The following table provides information as to the executive officers of
the Company.

NAME AGE POSITIONS AND OFFICES
- -------------------- --- ---------------------------------------------------------

Gordon D. Harnett 57 Chairman of the Board, President, Chief Executive Officer
and Director
Michael D. Anderson 48 Vice President, Beryllium Products
Brian J. Derry 54 Vice President, Operations
Stephen Freeman 53 President, Brush Wellman International
Jordan P. Frazier 42 President, Electronic Products
John D. Grampa 52 Vice President Finance and Chief Financial Officer
Michael C. Hasychak 46 Vice President, Treasurer and Secretary
Alfonso T. Lubrano 50 President, Technical Materials, Inc.
John J. Paschall 62 President, Williams Advanced Materials Inc.
Andrew J. Sandor 60 Vice President, Alloy Technology
William R. Seelbach 51 President, Alloy Products
Daniel A. Skoch 50 Vice President, Administration and Human Resources

MR. HARNETT was elected Chairman of the Board, President, Chief Executive
Officer and Director of the Company effective January, 1991. He had served as a
Senior Vice President of The B.F. Goodrich Company from November, 1988.

MR. ANDERSON was elected Vice President, Beryllium Products effective
March, 1996. He had served as Director of Sales and Marketing -- Beryllium
Products since November, 1994, Director of Marketing -- Ceramics since February,
1994 and Director of Marketing since April, 1989.

MR. DERRY was elected Vice President, Operations in May, 1997. Prior to
that time, he served as Director of Global Manufacturing for Ethyl Corporation.

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MR. FRAZIER was elected President, Electronic Products in November, 1999.
He had served as General Manager, Ceramic Products since December, 1997. He had
served as Director, Ceramic Operations since September, 1996. He had served as
Director of Sales and Marketing -- Ceramic Products since February, 1996. Prior
to that time, he had served as Plant Manager of the Tucson manufacturing
facility from 1992.

MR. FREEMAN was elected President, Brush Wellman International in November,
1999. He had served as Vice President, Alloy Products since February, 1995. He
had served as Vice President of Sales and Marketing since August, 1993. He had
served as Vice President of Sales and Marketing -- Alloy Products since July,
1992. Prior to that time, he had served as Management Consultant for Adastra,
Inc.

MR. GRAMPA was elected Vice President Finance and Chief Financial Officer
in November, 1999. He had served as Vice President Finance since October, 1998.
He had served as Vice President, Finance for the worldwide Materials Business of
Avery Dennison Corporation since March, 1994 and prior to that time he held
other various financial positions at Avery Dennison Corporation from 1984.

MR. HASYCHAK was elected Vice President, Treasurer and Secretary in
November, 1999. He had served as Treasurer and Secretary since May, 1994. Prior
to that time, he served as Treasurer and Assistant Secretary from 1990 and as
Assistant Treasurer from 1988.

MR. LUBRANO was elected President, Technical Materials, Inc. effective
April, 1995 and Vice President and General Manager effective March, 1992. Prior
to that time, he served as Vice President and Business Director of Engelhard
Corporation from 1987.

MR. PASCHALL was elected President, Williams Advanced Materials Inc.
effective November, 1991. He had served as Vice President,
Operations -- Williams Advanced Materials Inc. since April, 1989.

MR. SANDOR was elected Vice President, Alloy Technology effective March,
1996. He had served as Vice President, Operations since October, 1991. He had
served as Senior Vice President since September, 1989.

MR. SEELBACH was elected President, Alloy Products in June, 1998. Prior to
that time, he had been Chairman and CEO of Inverness Partners since October,
1987. Prior to Inverness Partners, he was a partner with McKinsey & Company.

MR. SKOCH was elected Vice President, Administration and Human Resources
effective March, 1996. He had served as Vice President, Human Resources since
July, 1991. Prior to that time, he was Corporate Director -- Personnel.

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PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS

The Company's Common Stock is traded on the New York Stock Exchange. As of
March 6, 2000 there were 2,299 shareholders of record. Information as to stock
price and dividends declared is set forth in Note O to the Consolidated
Financial Statements. The Company's ability to pay dividends is generally
unrestricted, except that it is obligated to maintain a specified level of
tangible net worth pursuant to an existing credit facility and a lease
agreement.

ITEM 6. SELECTED FINANCIAL DATA

Selected Financial Data is set forth on page F-27.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

RESULTS OF OPERATIONS

1999 1998 1997
--------- --------- ---------
(MILLIONS, EXCEPT FOR SHARE DATA)

Sales.................................................... $455.7 $409.9 $433.8
Operating Profit (loss).................................. 10.6 (10.3) 36.0
Diluted E.P.S. .......................................... $ 0.40 $(0.44) $ 1.56

Net sales in 1999 of $455.7 million were a record high and surpassed 1998
sales of $409.9 million by 11%. The resulting earnings per share of $0.40
compare to a loss of $0.44 per share in 1998. Earnings in 1998 were reduced by a
$22.6 million pre-tax special charge.

The Company has two business groups -- the Metal Systems Group and the
Microelectronics Group (MEG). Sales from both groups were higher in 1999 than
last year after they both posted declines in 1998. While profits from the Metal
Systems Group decreased again in 1999, the MEG recorded a strong increase in
their profitability in the current year.

METAL SYSTEMS GROUP

1999 1998 1997
------ ------ ------
(MILLIONS)

Sales.................................................... $306.1 $295.7 $302.4
Operating Profit......................................... 16.3 27.9 51.0

The Metal Systems Group consists of Alloy Products, Beryllium Products and
Engineered Material Systems (Technical Materials, Inc.). Metal Systems products
compete against other beryllium and non-beryllium alloys in a variety of
applications where a high degree of reliability and performance are required.
Depending upon the chemistry, form and application, the Company's engineered
materials provide superior electrical or heat conductivity, wear resistance,
formability, high strength, and high hardness characteristics. Sales from the
Metal Systems Group of $306.1 million were 4% higher in 1999 than 1998, a slight
recovery after the 2% sales decline in the prior year.

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12

The following chart highlights business unit sales as a percent of the
Metal Systems Group business segment:

1999 1998 1997
----- ----- -----
(PERCENT OF SEGMENT BY
BUSINESS UNIT)

Alloy Products.............................................. 71.9% 73.5% 74.7%
Engineered Material Systems (Technical Materials, Inc.)..... 20.5% 17.0% 17.0%
Beryllium Products.......................................... 7.6% 9.5% 8.3%

Alloy Products

Alloy Strip products, predominantly copper beryllium alloys, represent the
largest product family within the Metal Systems Group and are manufactured at
the Company's Elmore, Ohio and Reading, Pennsylvania facilities. Demand for
strip products from the telecommunications, automotive, and computer markets was
quite strong during 1999, rebounding from a general market softness and the
General Motors strike that caused sales in 1998 to be lower than 1997. The strip
sales value increased in 1999 from 1998, but still was behind the 1997 level.

Production capacity constraints limited the Company's ability to satisfy
the total demand for strip products in 1999 and 1998. With output unable to keep
pace with demand, total alloy strip pounds sold were just slightly higher in
1999 than in 1998, with most of the increased volume in lower priced, lower
beryllium containing alloys. Pounds shipped in 1999 returned to the level
shipped in 1997, but again with a shift to the lower priced alloys. The Company
believes that the capacity constraints have resulted in lost market share.

Beginning in 1996, the Company embarked upon a $117 million capital project
in Elmore to increase output, improve quality and lower the manufacturing costs
of alloy products. The project, known as the Alloy Expansion Project, or AEP,
consisted of two phases. The first was a new cast shop that was designed to
provide high quality cast billets for alloy strip and bulk product production.
The new cast shop started initial operation in the fourth quarter of 1997. Its
lower than expected yields and the resulting negative impact on material flow
and costs adversely affected sales, margins, and inventory utilization in 1998.
The second phase of the AEP was a new strip mill that replaced portions of the
existing mill in the Elmore facility. Selected pieces of equipment from the new
mill were installed in late 1998, but it was not until the second quarter 1999
that all of the equipment was constructed and installed. In 1999, the strip mill
equipment was unable to produce the desired output on a consistent and reliable
basis and strip manufacturing costs were higher than in 1998 due to additional
manning and lower yields. In order to expedite the start-up of the new mill and
improve the mill's up time, the Company secured the services of additional
outside resources and re-directed internal resources in the third and fourth
quarter of 1999. The majority of this concentrated effort was completed by the
end of 1999. As a result, output from the mill increased slightly and casting
and over-all yields showed some improvements, although yield rates still lagged
historical levels. The cost of this effort combined with yield and inefficiency
issues throughout the year served to reduce margins in 1999. The Company
anticipates that output from the mill should improve in 2000, and approximately
$8 million of costs incurred in 1999 should not repeat in 2000.

Alloy Bulk Products are also manufactured at Elmore in rod, bar, tube,
plate and a variety of other forms. Revenues from bulk products declined in 1999
approximately 9% from 1998 and were essentially equal to 1997. Demand from the
plastic mold tooling market was good throughout the three years presented while
orders for undersea communication applications, which had been delayed early in
1999, improved significantly in the latter part of 1999. Two key markets for
bulk products, aerospace and oil and gas, were very weak in 1999, compared to
the prior years, and were the main cause for the decline in the current year's
sales. To augment its product offerings, the Company constructed a facility in
Lorain, Ohio in 1997 to produce non-beryllium containing copper based bulk
alloys. Strategically, these products will serve a market and customer base
similar to the traditional bulk alloy products. Shipments from the Lorain
facility remained at levels behind plan and unchanged in 1999 from 1998 after a
very modest start in 1997. While the growth and

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profitability of these sales have been disappointing, the Company remains
committed to fully commercializing these products in the future.

Engineered Material Systems

Sales of Engineered Material Systems, which are manufactured by Technical
Materials, Inc. (TMI), a wholly-owned subsidiary of the Company, increased by
25% in 1999 over 1998 after a slight decline in 1998 from 1997 due to the
General Motors strike and weakness in the semi-conductor market. Over the last
seven years, sales of these products have now averaged an annual double-digit
growth rate. Engineered Material Systems are combinations of precious and
non-precious metal continuous precision strip products. The majority of these
products do not contain beryllium, but serve many of the same markets as do
copper beryllium alloy strip products. The sales improvement in 1999 was driven
by growth in new and existing applications in all major markets as well as by
the addition of new TMI plating technologies. TMI continues to expand its
investments to service the increasing demand from its customer base.

Beryllium Products

Beryllium Products sales declined in 1999 from 1998 after posting gains in
1998 from the previous year. Defense applications, while significantly lower
than the cold war levels of the 1970's and 1980's, remain an important market
for beryllium. In 1999, sales for defense applications decreased from the levels
in the previous several years as various programs were delayed or cancelled due
to government budget revisions following the U.S. military action in Kosovo.
Sales of x-ray windows and other beryllium products from the Fremont, California
facility were strong in 1999, but not sufficient to compensate for the drop in
defense applications.

Metal Systems Group Margin and Profit

Margins on Metal Systems sales decreased by $9.6 million in 1999 from 1998
after declining $22.7 million in 1998 from 1997. Higher sales volumes in 1999,
mainly Engineered Material Systems, as compared to 1998, generated an additional
$3.1 million of margin. However, higher direct manufacturing costs, including
the AEP start-up costs, and other product mix issues, reduced the gross margin
in 1999 by $8.1 million from 1998. Lease payments for the AEP equipment
commenced in 1999 and added $4.0 million to the overhead cost structure.
Depreciation expense at TMI increased by $0.2 million in 1999 as a result of
recent capital investments. Sales volumes were lower in 1998 versus 1997,
particularly Alloy Products, resulting in a $5.7 million reduction in 1998
margins. Margins in 1998 were further reduced by additional direct manufacturing
costs, primarily from the new cast shop in Elmore, and product mix totaling $5.6
million. The Lorain facility began operations late in 1997 and operated at a
loss in 1998, reducing 1998's margins by $2.7 million as compared to 1997. Other
overhead manufacturing costs increased by $8.7 million in 1998 over 1997. The
majority of this increase was at the Elmore facility and included $2.0 million
for lease payments on the AEP building and $1.8 million in additional
depreciation expense on Alloy equipment. Other overhead support costs, including
wages and utilities, increased at Elmore as well, while manufacturing overhead
costs at TMI increased by $0.5 million, the majority of which was depreciation.

Metal Systems' operating profit was $16.3 million in 1999, a decline from a
profit of $27.9 million in 1998 and $51.0 million in 1997, primarily for the
reasons discussed in the above paragraph.

MICROELECTRONICS GROUP (MEG)

1999 1998 1997
------ ------ ------
(MILLIONS)

Sales.................................................... $140.6 $106.3 $124.4
Operating Profit......................................... 11.4 2.1 2.9

The MEG provides a variety of materials for demanding electronic
applications. The group consists of Williams Advanced Materials Inc. (WAM), a
wholly owned subsidiary of the Company and Electronic Products. Electronic
Products was formerly known as Ceramics as the name was changed to reflect the
Company's continued expansion into new materials. MEG sales were $140.6 million
in 1999, an improvement of 32% over 1998 sales of $106.3 million.

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14

The following chart highlights business unit sales as a percent of the
Microelectronics Group business segment:

1999 1998 1997
----- ----- -----
(PERCENT OF SEGMENT BY
BUSINESS UNIT)

Williams Advanced Materials Inc. ........................... 77.2% 73.7% 74.5%
Electronic Products (formerly Ceramics)..................... 22.8% 26.3% 25.5%

Williams Advanced Materials Inc.

WAM manufactures and sells precious and non-precious metal physical vapor
deposition (PVD) targets, specialty alloys, and other precious metal products.
WAM's products serve the microelectronics, optical media, data storage,
performance film, and wear/decorative film markets. Increased demand and
development of new applications for these markets was responsible for a
significant portion of the MEG's revenue growth in 1999. In the optical media
market, WAM's targets are used to deposit the gold or silver reflective layer on
recordable CDs and digital video discs. WAM completed the expansion of its
manufacturing operations begun in 1998 that was designed to increase and support
its specialty alloy product offerings. WAM's acquisition of the assets of Pure
Tech in early July 1998 also provided additional revenue growth in 1999 and
1998. Pure Tech has been a major contributor to the MEG's higher profits over
the last eighteen months.

The decline in MEG sales in 1998 from 1997 was primarily a result of a
planned substitution of silver for gold in select PVD applications. Under this
program, the customer receives the benefits of a high quality product but at a
significantly lower cost as the cost of the precious metal content is a straight
pass-through to the customer. While the reported revenue from PVD was lower in
1998 than 1997, the actual number of targets sold increased, as did the
resulting value added (sales less metal cost). This substitution trend continued
in 1999, but at a slower pace. The number of targets sold and the value added
earned were higher again in 1999 than 1998.

Electronic Products

Electronic Products manufactures beryllia ceramic, electronic packages,
thick film circuits and powder metallurgy products that are used in a variety of
telecommunication, automotive, and electronic applications. Good thermal
conductivity is a key characteristic required for many of these applications.
Sales of these products also increased in 1999 over 1998, although the growth
was not as significant as the products sold by WAM. The majority of the growth
in 1999 was in beryllia ceramics as sales of these products in 1998 were also
negatively affected by the softness in the telecommunications market and the
General Motors strike. A competitor went out of business in 1999, allowing the
Company the opportunity to capture additional market share for its beryllia
ceramic products. Improved manufacturing processes implemented in late 1998 and
early 1999 resulted in higher yields and lower costs at the Company's
Newburyport, MA. facility and helped support a growth in market opportunities
for various direct bond copper products. Powder metallurgy products represent a
fairly recent expansion of the MEG's product offerings and the Company has
constructed a new facility in Tucson, AZ. to produce these materials. Thick film
circuits are produced at Circuits Processing Technologies, Inc., a wholly-owned
subsidiary of the Company in Oceanside, CA. These sales have remained flat
primarily due to delays in actual government spending on approved contracts. The
MEG continues to pursue non-government dependent applications for its circuit
technology.

Microelectronics Group Margin and Profit

Margins on MEG sales increased by $11.7 million in 1999 over 1998. Higher
sales volumes, mainly WAM products, contributed $8.2 million to this increase.
Cost improvements from Electronic Products operations accounted for the majority
of the balance of the change. The 1998 gross margin was $0.3 million better than
1997. The higher sales volume from WAM products provided an additional $3.2
million of margin in 1998, while the lower Electronic Product sales volumes
caused a $1.0 million decline in margins. The net

12
15

benefit of the above was reduced by inefficiency issues at the Newburyport
facility. WAM'S manufacturing overhead costs also increased $1.0 million in 1998
over 1997 due to the expansion of operations.

The MEG's operating profit of $11.4 million in 1999 represents a
significant improvement over the $2.1 million earned in 1998 and the $2.9
million earned in 1997, primarily because of the reasons discussed in the above
paragraph, offset by a full year of expenses by Pure Tech in 1999 compared to
only six months in 1998 and none in 1997.

SPECIAL CHARGE

In 1998, the Company recorded a pre-tax special charge of $22.6 million
(see Note I to the Consolidated Financial Statements). The charge included a
write-down of various fixed assets and related intangibles to their estimated
fair values in accordance with SFAS No. 121. The Company's long-term strategic
plans anticipated only modest growth from the related operations and the
projected cash flows were not sufficient to support the carrying value of the
assets. The written-down assets were not taken out of service. Additional
charges were taken for assets that had become obsolete as well as for an
increase to the environmental remediation reserve. Of the $22.6 million charge,
$5.6 million was recorded against Cost of sales and $17.0 million against
Other-net. The after tax impact of the charge was $16.5 million. While the
charge included the write-down of assets within both the Metal Systems Group and
the MEG, the charge was not allocated back to either group as management
evaluates their performance exclusive of the charge.

INTERNATIONAL SALES AND OPERATIONS

1999 1998 1997
------ ------ ------
(MILLIONS)

From International Operations............................... $ 87.2 $ 82.0 $ 88.7
Exports from U.S. Operations................................ 50.3 47.1 53.7
Total International Sales................................... $137.5 $129.1 $142.4
Percent of Total Sales...................................... 30% 31% 33%

The international sales figures in the above table are included in the
Metal Systems and MEG sales totals previously discussed. International
operations consist of distribution centers in Germany, England, Japan, and
Singapore, which are managed by the Metal Systems Group, and a precious metal
finishing facility in Singapore, which is part of the MEG. To augment these
operations, the Company has strategically deployed a network of independent
distributors and agents throughout the world. International markets served are a
reflection of the markets served in the U.S. The distribution centers have
competitors based in that country in addition to other international
competitors. Products sold by the distribution centers typically are priced in
their local currency, which is generally perceived to be a benefit to the
customer. On average, the dollar was stronger in 1998 than 1997 and weaker in
1999 than 1998; therefore, the currency translation impact on sales was
favorable in 1999 and unfavorable in 1998. Sales of Metal Systems products,
particularly alloy strip and bulk, into Asia declined in the second quarter 1998
due to general economic conditions. After remaining flat at these low levels for
several quarters, Asian sales started to grow once again and 1999 sales in this
region were higher than 1998.

In addition to sales from the international facilities, the Company exports
products directly to unaffiliated customers from its U.S. operations. The
majority of these sales are to Western Europe, Canada, Mexico, and South Asia.
Direct exports are usually denominated in U.S. dollars. While total
international sales, as a percent of consolidated sales, declined slightly in
1998 and again in 1999, the Company believes that the international markets
offer excellent long-term growth opportunities.

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CONSOLIDATED

1999 1998 1997
------ ------ ------
(DOLLARS IN MILLIONS)

Sales....................................................... $455.7 $409.9 $433.8
Operating Profit/(loss)..................................... 10.6 (10.3) 36.0
Net Income/(loss)........................................... $ 6.4 $ (7.1) $ 25.6
As a Percent of Sales
Gross Profit................................................ 20.2% 20.7% 25.2%
SA&G Expense................................................ 15.5% 15.7% 15.0%
R&D Expense................................................. 1.9% 2.1% 1.8%

The Company has other operations and costs that are not part of the Metal
Systems Group or the MEG, including the beryllium mine and extraction facility
and the corporate office. The consolidated sales from all operations were $455.7
million in 1999, $409.9 million in 1998 and $433.8 million in 1997. Gross margin
from all operations and including the special charge was 20.2% of sales in 1999,
20.7% in 1998 and 25.2% in 1997. In addition to the factors previously cited,
the overall mix of products has had a negative impact on margins, particularly
in 1999. Metal Systems products typically generate higher variable margins
(sales less materials and direct conversion costs) than MEG products and the
majority of the revenue growth in 1999 was in MEG products.

EXPENSES

Selling, administrative, and general expenses (SA&G) were $70.6 million in
1999, or 15.5% of sales, compared to $64.6 million in 1998, or 15.7% of sales,
and $65.3 million in 1997, or 15.0% of sales. Selling and marketing costs were
higher in 1999 than 1998 in order to support the current growth in sales and as
a result of the Company's continued investment in its market development
activity. The completion of various software implementation projects resulted in
additional amortization expense in 1999 compared to the prior years. In
addition, there was a full year of expenses from Pure Tech in 1999 compared to
only six months in 1998 and none in 1997. Administrative costs for
environmental, health and safety, and medical costs were also higher in 1999
than previous years as the Company expanded its efforts even further to research
the causes and prevention of chronic beryllium disease. SA&G expenses were lower
in 1998 than in 1997. Non-recurring planning and strategic development work for
the Lorain facility was incurred in the first part of 1997. Payments under
various management compensation plans were higher in 1997 than in the subsequent
two years due to higher levels of profitability.

Research and Development (R&D) expenses were $8.5 million in 1999, $8.7
million in 1998, and $7.7 million in 1997. As a percent of sales, R&D expenses
were 1.9% in 1999, 2.1% in 1998, and 1.8% in 1997. There were no major changes
in the strategic thrusts for R&D in 1999, although for a portion of the year
some R&D resources were temporarily assigned to assist with the AEP. The 1999
expense was affected by a more focused scope on a new product development
project and a minor reimbursement of expenses under an agreement with a
customer. The increase in expenses in 1998 over 1997 was due to additional
support for the product development work at the Lorain facility and for the
development of improved casting techniques and processes. The majority of the
R&D effort supports the Metal Systems Group. In 1998, R&D efforts within the MEG
lead to the DBC process and cost improvements.

Other-net expense was $2.3 million in 1999 versus $21.8 million in 1998 and
$0.3 million in 1997. Other-net includes foreign currency exchange gains/losses,
precious metal consignment fees, bad debt expense, cash discounts, amortization
of goodwill and other intangibles, licensing fees, charges associated with
vacant properties owned by the Company and other non-operating items. The 1998
expense included $17.0 million of the special charge. In addition, foreign
currency exchange gains/(losses) were $2.2 million in 1999, as compared to
($1.8) million in 1998, and precious metal consignment fees totaled $3.5 million
in 1999 compared to $1.8 million in 1998. The increase in 1999 precious metal
fees was due to higher consigned inventory levels, average metal prices and
available rates. In addition to the special charge of $17.0 million in

14
17

1998, foreign currency losses in 1998 totaled $1.8 million compared to foreign
currency gains of $2.3 million in 1997, and the precious metal fee in 1998 was
$.7 million lower than 1997.

As explained in Note L to the Consolidated Financial Statements, the
Company revised the expected rate of return on asset assumption used to
calculate the 1999 pension expense in accordance with SFAS No. 87, "Employers
Accounting for Pensions." The rate was increased to 10.0% from 9.0% to more
accurately reflect the expected performance of the pension plans' assets. The
change resulted in a favorable impact of approximately $0.9 million that was
booked against Cost of sales, SA&G expenses and R&D expenses in 1999. It is
anticipated that this change will result in a lower pension expense in 2000 than
had the change not been made.

EARNINGS, INTEREST, AND TAXES

Operating profit was $10.6 million in 1999. In 1998, the operating loss was
$10.3 million including the $22.6 million special charge while the profit in
1997 was $36.0 million.

Interest expense was $4.2 million in 1999, an increase of $3.0 million over
an expense of $1.2 million in 1998. In 1997, interest expense was only $0.6
million. These figures are net of interest capitalized in association with
spending on capital projects. Capital expenditures were significantly lower in
1999 than the prior two years and therefore less interest was capitalized.
Actual interest incurred was $4.3 million in 1999, $2.8 million in 1998, and
$2.4 million in 1997. The average level of debt outstanding was higher in 1998
than 1997 and it was even higher in 1999. The average borrowing rate was also
higher in 1999 after showing a slight decrease in 1998.

An income tax benefit was applied at a rate of 0.8% of income before income
taxes in 1999. The rate was affected by research and experimentation credits,
depletion credits, benefits from foreign operations, and lower profits. See Note
J to the Consolidated Financial Statements for a reconciliation of the effective
and statutory rates. In 1998, a tax benefit rate of 38.3% was applied against
the loss before income taxes while a tax expense of 27.8% of income before
income taxes was recorded in 1997.

Net income was $6.4 million in 1999 compared to a net loss of $7.1 million
in 1998 and net income of $25.6 million in 1997. Diluted earnings/(loss) per
share were $0.40 in 1999, ($0.44) in 1998 and $1.56 in 1997.

LEGAL PROCEEDINGS

The Company is a defendant in proceedings in various state and federal
courts by plaintiffs alleging that they have contracted chronic beryllium
disease ("CBD") or related ailments as a result of exposure to beryllium.
Plaintiffs in CBD cases seek recovery under theories of intentional tort and
various other legal theories and seek compensatory and punitive damages, in many
cases of an unspecified sum. Spouses, if any, claim loss of consortium.

The following table summarizes the historic trends in the CBD cases:

DECEMBER 31,
-----------------------------
1999 1998 1997
----- ------ ------

Total cases pending......................................... 37 19 28
Total plaintiffs............................................ 119 95 133
Number of claims (plaintiffs) filed during period ended..... 20(28) 2(4) 9(48)
Number of claims (plaintiffs) settled during period ended... 2(4) 9(36) 3(5)
Aggregate settlements paid during period ended (dollars in
thousands)................................................ $ 183 $1,193 $1,389
Number of claims (plaintiffs) dismissed..................... 0(0) 2(6) 4(8)

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18

From January 1, 2000 through March 23, 2000, eight additional CBD claims
were filed against the Company.

Additional CBD claims may arise. Management believes the Company has
substantial defenses in these cases and intends to contest the suits vigorously.
Employee cases, in which plaintiffs have a high burden of proof, have
historically involved relatively small losses to the Company. Third party
plaintiffs (typically employees of our customers) face a lower burden of proof
than do our employees, but these cases are generally covered by insurance.

Although it is not possible to predict the outcome of the litigation
pending against the Company and its subsidiaries, the Company provides for costs
related to these matters when a loss is probable and the amount is reasonably
estimable. Litigation is subject to many uncertainties, and it is possible that
some of these actions could be decided unfavorable in amounts exceeding the
Company's reserves. An unfavorable outcome or settlement of a pending CBD case
or additional adverse media coverage could encourage the commencement of
additional similar litigation. The Company is unable to estimate its potential
exposure to unasserted claims.

While the Company is unable to predict the outcome of the current or future
CBD proceedings, based on currently known facts and assuming collectibility of
insurance, the Company does not believe that resolution of these proceedings
will have a material adverse effect on the financial condition or cash flow of
the Company. However, the Company's results of operations could be materially
affected by unfavorable results in one or more of these cases. (See Item
3 -- "Legal Proceedings").

FINANCIAL POSITION

WORKING CAPITAL

Net cash from operations was $24.5 million in 1999, an improvement of $5.0
million from the net cash generated by operations in 1998. Net working capital
increased in 1999 in part to support the higher level of business. Accounts
receivable increased by $17.6 million during 1999. While the majority of this
increase is due to higher sales activity, particularly in the fourth quarter
1999 as compared to the fourth quarter 1998, the average collection period has
increased. However, the actual receivables either turned over for collection or
written off as totally uncollectible remained at very low levels. Cash balances
were $0.1 million as of December 31, 1999 compared to $1.9 million at December
31, 1998.

Inventories grew $7.5 million in 1999 from 1998 after growing $12.4 million
in 1998 from 1997. A portion of the growth is in work-in-process inventories at
Elmore due to the AEP production and associated material flow issues. While
work-in-process inventories were higher, the production constraints have
prevented the material from being converted into finished goods as rapidly as
the market required. In addition, the Company attempts to recycle as much of its
beryllium-containing alloys as feasible. The low yield rates in both years
resulted in higher levels of scrap. This scrap is maintained in inventory at the
appropriate value and is available to be or already has been remelted and
reprocessed. Inventories also increased in 1999 to support the higher MEG sales.
In 1998, the start-up of the Lorain manufacturing operations and the acquisition
of Pure Tech also contributed to the inventory build.

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DEPRECIATION AND AMORTIZATION

Depreciation, depletion, and amortization was $20.8 million in 1999
compared to $21.5 million in 1998. In 1999, the additional depreciation and
amortization on recent capital additions was offset by lower expenses as a
result of various assets being written down as part of the 1998 special charge.
Amortization of deferred mine development costs were $6.3 million in 1999 and
$3.1 million in 1998. The Company's mining operations were devoted to
constructing two new pits rather than pulling ore out of an existing pit in
early 1998, thereby reducing the 1998 amortization. The 1999 amortization is
also higher due to the higher cost of the new pits. The Company amortizes
deferred mine development costs based upon the units of production method as ore
is extracted from the open pits.

CAPITAL EXPENDITURES

Capital expenditures for property, plant, and equipment and mine
development were $17.0 million in 1999 compared to $37.2 million in 1998. The
spending level was lower in 1999 than in recent years as the construction phase
of several major projects reached completion. Capital expenditures for Metal
Systems were $11.4 million in 1999. Major projects included upgrades to existing
alloy strip manufacturing equipment at the Elmore and Reading facilities and an
improved ventilation system in the beryllium metal manufacturing facility in
Elmore. Capital expenditures for the MEG were $3.4 million in 1999 and included
the payments to complete the new precious metal specialty alloy products
facility and the new powder metallurgy facility.

The assets of Pure Tech Inc. were acquired for $12.4 million in cash at the
end of the second quarter 1998. The acquisition was accounted for as a purchase.

YEAR 2000

The Company also completed the initial phase of several large information
system implementation projects in both Metal Systems and the MEG in 1999. One
result of the implementation of these new systems is that they replaced numerous
legacy computer systems that may not have been Year 2000 compliant. The Company
also upgraded many of the remaining legacy systems with one of the benefits of
the upgrades being bringing those systems into Year 2000 compliance as well.
During 1999 and 1998, the Company approached the required remediation of any
Year 2000 issues with its computer chip based equipment through a five step
approach of inventory, investigation, remediation, testing, and implementation.
Outside consultants were retained to assist in this effort. The Company also
worked with third parties, including customers and vendors, to assess the
potential risks and to develop contingency plans as warranted. The incremental
expense for the Year 2000 compliance activity was $0.5 million in 1999 and $1.0
million in 1998. As of early March 2000, the Company had not experienced any
Year 2000 compliance issues that significantly impacted its operations. While
considered unlikely and despite all efforts thus far, the Company could still be
negatively affected by unanticipated problems that may occur in the Company's
computer systems or operating equipment or with non-compliant third parties. The
Company will continue to monitor its business processes through-out 2000 and
will address any compliance issues accordingly.

DEBT

Total balance sheet debt stood at $77.0 million at December 31, 1999, a
decrease of $0.7 million from December 31, 1998. The average debt level for the
entire year was higher in 1999 than 1998 as debt increased by $30.9 million
during 1998. Short-term debt declined by $10.9 million during 1999 while
long-term debt increased by $10.2 million. Short-term debt includes $21.2
million denominated in foreign currencies, $6.9 million denominated in gold, and
$5.8 million of the current portion of long-term debt. Available unused
short-term credit lines total $17.9 million as of December 31,1999, a decline of
$2.1 million from December 31, 1998. The Company also has a $55.0 million
revolving credit agreement with five banks and a $75.0 million private placement
agreement. Unused borrowings under these two long-term facilities totaled $94.0
million as of December 31, 1999. In January and September, 1999, the Company
amended certain portions of its various debt agreements, including a covenant
that restricts the level of outstanding debt to a multiple of earnings before
interest, taxes, depreciation and amortization (funded debt to EBITDA ratio).

17
20

The AEP is financed in part by two operating leases totaling $79.7 million.
Payments under the facility lease began in December 1997. Payments under the
equipment lease, which are graduated to increase over time, began in early 1999.
See Note F to the Consolidated Financial Statements for further leasing details.

COMMON STOCK

Dividends paid were $0.12 per outstanding share for each quarter of 1999
and 1998. There were no purchases of common stock in 1999 while in 1998 the
Company purchased 250,000 of its shares at a cost of $5.3 million.

OTHER

Funds from operations and the available borrowing capacity are believed to
be adequate to support operating requirements, capital expenditures, remediation
projects, and dividends. Excess cash, if any, is invested in money market or
other high quality investments.

ORE RESERVES

The Company's reserves of beryllium-bearing bertrandite ore are located in
Juab County, Utah. An ongoing drilling program has generally added to proven
reserves. Proven reserves are the measured quantities of ore commercially
recoverable through the open pit method. Probable reserves are the estimated
quantities of ore known to exist, principally at greater depths, but prospects
for commercial recovery are indeterminable. Ore dilution that occurs during
mining approximates 7%. About 87% of beryllium in ore is recovered in the
extraction process. The Company augments its proven reserves of bertrandite ore
through the purchase of imported beryl ore (approximately 4% beryllium) which is
also processed at the Utah extraction plant.

Beginning in 1998, updated computer models are being used to estimate ore
reserves which are subject to economic and physical evaluation. Development
drilling has affected the total ore reserves to some degree. The requirement
that reserves pass an economic test causes open-pit mineable ore to be found in
both proven and probable geologic settings. Although both the proven ore
reserves and the open-pit mining depths have increased, the probable reserves
have substantially decreased. Based upon average production levels in recent
years, proven reserves would last seventy years or more. Ore reserves classified
as possible are excluded from the following table.

1999 1998 1997 1996 1995
----- ----- ----- ----- -----

Proven bertrandite ore reserves at year end
(thousands of dry tons).......................... 7,769 7,747 6,924 6,763 6,927
Grade % beryllium.................................. 0.265% 0.259% 0.249% 0.249% 0.249%
Probable bertrandite ore reserves at year end
(thousands of dry tons).......................... 3,081 3,535 6,750 7,432 7,346
Grade % beryllium.................................. 0.215% 0.210% 0.277% 0.281% 0.281%
Bertrandite ore processed (thousands of dry tons,
diluted)......................................... 93 113 110 97 96
Grade % beryllium, diluted......................... 0.240% 0.234% 0.229% 0.236% 0.232%

INFLATION AND CHANGING PRICES

The prices of certain major raw materials, including copper, nickel, gold,
silver, and other precious metals purchased by the Company fluctuate during a
given year. Such changes in costs are generally reflected in selling price
adjustments. The prices of labor and other factors of production generally
increase with inflation. Additions to capacity, while more expensive over time,
usually result in greater productivity or improved yields. However, market
factors, alternative materials, and competitive pricing affect the Company's
ability to offset wage and benefit increases. The Company uses the last-in,
first-out (LIFO) inventory valuation method domestically to more closely match
current costs with revenues.

18
21

ENVIRONMENTAL MATTERS

As indicated in Note M to the Consolidated Financial Statements, the
Company maintains an active program of environmental compliance. For projects
involving remediation, estimates of the probable costs are made and the Company
has reserved $8.3 million at December 31, 1999 ($7.9 million at December 31,
1998). This reserve covers existing and currently foreseen projects.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Consistent with the prior year, the Company is exposed to commodity price,
interest rate, and foreign exchange rate differences. The Company attempts to
minimize the effects of these exposures through a combination of natural hedges
and the use of derivatives. See Note G to the Consolidated Financial Statements.

The Company uses gold and other precious metals in manufacturing various
MEG and Metal Systems products. While the mix of the different precious metals
may have changed slightly from last year, the methods used to hedge the exposure
have not. To minimize exposure to market price changes, precious metals are
maintained on a consigned inventory basis. The metal is purchased out of
consignment when it is ready to ship to a customer as a finished product. The
Company's purchase price forms the basis for the price charged to the customer
for the precious metal content and, therefore, the current cost is matched to
the price. The Company does maintain a certain level of gold in its own
inventory, but this is typically balanced out by having a loan denominated in
gold for the same number of ounces. Any change in the market price of gold,
either higher or lower, will result in an equal change in the book value of the
asset and liability.

The Company is charged a consignment fee by the financial institutions that
actually own the gold. This fee, along with the interest charged on the gold
loan, is partially a function of the market price of gold. Because of market
forces and competition, the fee, but not the interest on the loan, can be
charged to customers on a case by case basis. Should the market price of
precious metals used by the Company increase by 15% from the levels on December
31, 1999, the additional pre-tax cost to the Company on an annual basis would be
approximately $0.7 million. This calculation assumes no changes in the quantity
of inventory or the underlying fee and interest rates and that none of the
additional fee is charged to customers.

The Company also uses base metals, primarily copper, in its production
processes. Fluctuations in the market price of copper are passed on in the form
of price adders (or as price reductions) to customers for the majority of the
copper sales volumes. However, when the Company cannot pass through the price of
copper, margins can be reduced by increases in the market price of copper. To
hedge this exposure, the Company enters into copper swaps with financial
institutions that exchange a variable price of copper for a fixed price. By so
doing, the difference between the Company's purchase price and selling price of
copper will be a known, fixed value for the quantities covered by the swaps.
Based upon copper swaps outstanding at December 31, 1999 that will mature during
2000, management estimates a 10% decrease in the price of copper from the
December 31, 1999 level will reduce the gain on these contracts and decrease
pre-tax income by approximately $0.2 million. This calculation excludes the
additional profit that the Company anticipates it would make by selling copper
at a fixed price that cost 10% less than it does on December 31, 1999.

The Company is exposed to changes in interest rates on its debt and cash.
This interest rate exposure is managed by maintaining a combination of
short-term and long-term debt and variable and fixed rate instruments. The
Company also uses interest rate swaps to fix the interest rate on variable debt
obligations as it deems appropriate. Excess cash, if any, is typically invested
in high quality instruments that mature in seven days or less. If interest rates
were to increase 200 basis points (2%) from the December 31, 1999 rates and
assuming no changes in debt or cash from the December 31, 1999 levels, the
additional annual net expense would be approximately $0.6 million on a pre-tax
basis. The calculation excludes any additional expense on fixed rate debt that
is scheduled to mature in 2000 that may or may not be extended at the prevailing
interest rates.

The Company sells products in foreign currencies, mainly the deutschmark,
yen and pound sterling. The majority of these products' costs are incurred in
U.S. dollars. The Company is exposed to currency movements

19
22

in that if the U.S. dollar strengthens, the translated value of the foreign
currency sale and the resulting margin will be reduced. The Company does not
change the price of its products for short-term exchange rate movements because
of its local competition. To minimize this exposure, the Company purchases
foreign currency forward contracts and options. Should the dollar strengthen,
the decline in margins should be offset by a gain on the contract. A decrease in
the value of the dollar would result in larger margins but potentially a loss on
the contract, depending upon the method used to hedge. If the dollar weakened
10% against all currencies from the December 31, 1999 exchange rates, the
additional loss on the outstanding contracts as of December 31, 1999 would
reduce pre-tax profits by approximately $3.5 million. This calculation does not
take into account the increase in margins as a result of translating foreign
currency sales at the more favorable exchange rate, any changes in margins from
potential volume fluctuations caused by currency movements, or the translation
effects on any other foreign currency denominated income statement or balance
sheet item.

The notional value of the outstanding currency contracts increased from
$44.8 million at December 31, 1998 to $56.2 million at December 31, 1999 as a
result of the Company increasing its coverage to the estimated exposures greater
than one year but less than two years out. The notional value of the copper
swaps was $1.6 million at December 31, 1999 compared to $8.1 million at December
31, 1998. In 1999, the Company reduced its coverage of exposures greater than
one year to allow for flexibility and due to other market forces. The notional
value of the interest rate swaps at December 31, 1999 remained unchanged from
December 31, 1998.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The report of independent auditors and the following Consolidated Financial
Statements of the Company for the year ended December 31, 1999 are set forth on
pages F-1 to F-25.

Consolidated Balance Sheets -- December 31, 1999 and 1998.

Consolidated Statements of Income -- Years ended December 31, 1999, 1998
and 1997.

Consolidated Statements of Shareholders' Equity -- Years ended December 31,
1999, 1998 and 1997.

Consolidated Statements of Cash Flows -- Years ended December 31, 1999,
1998 and 1997.

Notes to Consolidated Financial Statements.

Quarterly data is set forth in Note O to the Consolidated Financial
Statements.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

20
23

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information required under this heading is incorporated by reference
from the Proxy Statement for the Company's 2000 annual meeting to be filed with
the Securities and Exchange Commission pursuant to Regulation 14A. Information
with respect to Executive Officers of the Company is set forth under Item 4A --
Executive Officers of the Registrant.

ITEM 11. EXECUTIVE COMPENSATION

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Not applicable.

21
24

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES AND REPORTS ON FORM 8-K

(a) 1. FINANCIAL STATEMENTS AND SUPPLEMENTAL INFORMATION

Included in Item 8 of this Form 10-K annual report are the following
consolidated financial statements:

Consolidated Balance Sheets -- December 31, 1999 and 1998.

Consolidated Statements of Income -- Years ended December 31, 1999, 1998
and 1997.

Consolidated Statements of Shareholders' Equity -- Years ended December 31,
1999, 1998 and 1997.

Consolidated Statements of Cash Flows -- Years ended December 31, 1999,
1998 and 1997.

Notes to Consolidated Financial Statements.

Report of Independent Auditors.

(a) 2. FINANCIAL STATEMENT SCHEDULES

The following consolidated financial information for the years ended
December 31, 1999, 1998 and 1997 is submitted herewith:

Schedule II -- Valuation and qualifying accounts (page 28).

All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable, and therefore
have been omitted.

(a) 3. EXHIBITS

(3a) Second Amended and Restated Articles of Incorporation of the
Company dated January 27, 1998 (filed as Exhibit 3a to the
Company's Form 10-K Annual Report for the year ended
December 31, 1997), incorporated herein by reference.

(3b) Regulations of the Company as amended April 27, 1993 (filed
as Exhibit 3b to the Company's Form 10-K Annual Report for
the year ended December 31, 1994, Commission File No.
1-7006), incorporated herein by reference.

(4a) Credit Agreement dated as of December 13, 1994 between the
Company and National City Bank acting for itself and as
agent for three other banking institutions (filed as Exhibit
4a to the Company's Form 10-K Annual Report for the year
ended December 31, 1994, Commission File No. 1-7006),
incorporated herein by reference.

(4b) First Amendment to Amended and Restated Credit Agreement
dated December 30, 1996 between Brush Wellman Inc. and
National City Bank acting for itself and as agent for three
other banking institutions (filed as Exhibit 4b to the
Company's Form 10-K Annual Report for the year ended
December 31, 1996), incorporated herein by reference.

(4c) Second Amendment to Amended and Restated Credit Agreement
dated September 2, 1997 between Brush Wellman Inc. and
National City Bank acting for itself and as agent for
certain other banking institutions (filed as Exhibit 4c to
the Company's Form 10-K Annual Report for the year ended
December 31, 1997), incorporated herein by reference.

(4d) Third Amendment to Amended and Restated Credit Agreement
dated January 26, 1999 between Brush Wellman Inc. and
National City Bank acting for itself and as agent for
certain other banking institutions (filed as Exhibit 4d to
the Company's Form 10-K Annual Report for the year ended
December 31, 1998), incorporated herein by reference.

22
25

(4e) Rights Agreement between the Company and National City Bank
N.A. dated January 27, 1998 (filed as Exhibit 4d to the
Company's Form 10-K Annual Report for the year ended
December 31, 1997), incorporated herein by reference.

(4f) Issuing and Paying Agency Agreement dated as of February 1,
1990, including a specimen form of a medium term note issued
thereunder, between the Company and First Trust N.A.
(formerly with Morgan Guaranty Trust Company of New York)
(filed as Exhibit 4c to the Company's Form 10-K Annual
Report for the year ended December 31, 1994, Commission File
No. 1-7006), incorporated herein by reference.

(4g) Pursuant to Regulation S-K, Item 601 (b)(4), the Company
agrees to furnish to the Commission, upon its request, a
copy of the instruments defining the rights of holders of
long-term debt of the Company that are not being filed with
this report.

(4h) Fourth Amendment to Amended and Restated Credit Agreement
dated September 30, 1999 between Brush Wellman Inc. and
National City Bank acting for itself and as agent for
certain other banking institutions.

(10a)* Employment Agreement entered into by the Company and Mr.
Gordon D. Harnett on March 20, 1991 (filed as Exhibit 10a to
the Company's Form 10-K Annual Report for the year ended
December 31, 1990, Commission File No. 1-7006), incorporated
herein by reference.

(10b)* Form of Employment Agreement entered into by the Company and
Mr. Sandor on February 20, 1989 (filed as Exhibit 10b to the
Company's Form 10-K Annual Report for the year ended
December 31, 1994, Commission File No. 1-7006), incorporated
herein by reference.

(10c)* Form of Employment Agreement entered into by the Company and
Messrs. Anderson, Frazier, Hasychak, Lubrano and Paschall on
March 2, 1999 (filed as Exhibit 10c to the Company's Form
10-K Annual Report for the year ended December 31, 1998),
incorporated herein by reference.

(10d)* Form of Amendment to the Employment Agreement (dated
February 20, 1989) entered into by the Company and Mr.
Sandor dated February 28, 1991 (filed as Exhibit 10c to the
Company's Form 10-K Annual Report for the year ended
December 31, 1990, Commission File No. 1-7006), incorporated
herein by reference.

(10e)* Form of Employment Agreement entered into by the Company and
Mr. Daniel A. Skoch on January 28, 1992, Mr. Stephen Freeman
dated August 3, 1993 and Mr. Brian J. Derry dated May 6,
1997 (filed as Exhibit 10d to the Company's Form 10-K Annual
Report for the year ended December 31, 1991, Commission File
No. 1-7006), incorporated herein by reference.

(10f)* Form of Employment Agreement entered into by the Company and
Mr. William R. Seelbach dated June 29, 1998 (filed as
Exhibit 10a to the Company's Form 10-Q Quarterly Report for
the quarter ended July 3, 1998), incorporated herein by
reference.

(10g)* Employment Arrangement between the Company and Mr. William
R. Seelbach dated June 3, 1998 (filed as Exhibit 10b to the
Company's Form 10-Q Quarterly Report for the quarter ended
July 3, 1998), incorporated herein by reference.

(10h)* Addendum to Employment Arrangement between the Company and
Mr. William R. Seelbach dated June 24, 1998 (filed as
Exhibit 10c to the Company's Form 10-Q Quarterly Report for
the quarter ended July 3, 1998), incorporated herein by
reference.

(10i) Form of Indemnification Agreement entered into by the
Company and Mr. William R. Seelbach dated June 29, 1998
(filed as Exhibit 10d to the Company's Form 10-Q Quarterly
Report for the quarter ended July 3, 1998), incorporated
herein by reference.

23
26

(10j)* Form of Trust Agreement between the Company and Key Trust Company of Ohio, N.A. (formerly
Ameritrust Company National Association) on behalf of the Company's executive officers (filed as
Exhibit 10e to the Company's Form 10-K Annual Report for the year ended December 31, 1994,
Commission File No. 1-7006), incorporated herein by reference.

(10k) Form of Indemnification Agreement entered into by the Company and its executive officers (filed
as Exhibit 10g to the Company's Form 10-K Annual Report for the year ended December 31, 1994,
Commission File No. 1-7006), incorporated herein by reference.

(10l) Form of Indemnification Agreement entered into by the Company and its directors (filed as Exhibit
10h to the Company's Form 10-K Annual Report for the year ended December 31, 1994, Commission
File No. 1-7006), incorporated herein by reference.

(10m)* Deferred Compensation Plan for Nonemployee Directors effective January 1, 1992 (filed as Exhibit
I to the Company's Proxy Statement dated March 6, 1992, Commission File No. 1-7006), incorporated
herein by reference.

(10n)* Form of Trust Agreement between the Company and National City Bank dated January 1, 1992 on
behalf of Nonemployee Directors of the Company (filed as Exhibit 10k to the Company's Form 10-K
Annual Report for the year ended December 31, 1992, Commission File No. 1-7006), incorporated
herein by reference.

(10o)* Incentive Compensation Plan adopted December 16, 1991, effective January 1, 1992 (filed as
Exhibit 10l to the Company's Form 10-K Annual Report for the year ended December 31, 1991,
Commission File No. 1-7006), incorporated herein by reference.

(10p)* Supplemental Retirement Plan as amended and restated December 1, 1992 (filed as Exhibit 10n to
the Company's Form 10-K Annual Report for the year ended December 31, 1992, Commission File No.
1-7006), incorporated herein by reference.

(10q)* Amendment Number 2, adopted January 1, 1996, to Supplemental Retirement Benefit Plan as amended
and restated December 1, 1992 (filed as Exhibit 10o to the Company's Form 10-K Annual Report for
the year ended December 31, 1995, Commission File No. 1-7006), incorporated herein by reference.

(10r)* Amendment Number 3, adopted May 5, 1998, to Supplemental Retirement Benefit Plan as amended and
restated December 1, 1992 (filed as Exhibit 10s to the Company's Form 10-K Annual Report for the
year ended December 31, 1998), incorporated herein by reference.

(10s)* Amendment Number 4, adopted December 1, 1998, to Supplemental Retirement Benefit Plan as amended
and restated December 1, 1992 (filed as Exhibit 10t to the Company's Form 10-K Annual Report for
the year ended December 31, 1998), incorporated herein by reference.

(10t)* Amendment Number 5, adopted December 31, 1998, to Supplemental Retirement Benefit Plan as amended
and restated December 1, 1992 (filed as Exhibit 10u to the Company's Form 10-K Annual Report for
the year ended December 31, 1998), incorporated herein by reference.

(10u)* Form of Trust Agreement between the Company and Key Trust Company of Ohio, N.A. (formerly Society
National Bank) dated January 8, 1993 pursuant to the December 1, 1992 amended Supplemental
Retirement Benefit Plan (filed as Exhibit 10p to the Company's Form 10-K Annual Report for the
year ended December 31, 1992, Commission File No. 1-7006), incorporated herein by reference.

24
27

(10v)* Key Employee Share Option Plan (filed on Form S-8 on May 5, 1998), incorporated herein by
reference.

(10w)* 1979 Stock Option Plan, as amended pursuant to approval of shareholders on April 21, 1982 (filed
as Exhibit 15A to Post- Effective Amendment No. 3 to Registration Statement No. 2-64080),
incorporated herein by reference.

(10x)* 1984 Stock Option Plan as amended by the Board of Directors on April 18, 1984 and February 24,
1987 (filed as Exhibit 4.4 to Registration Statement No. 33-28605), incorporated herein by
reference.

(10y)* 1989 Stock Option Plan (filed as Exhibit 4.5 to Registration Statement No. 33-28605),
incorporated herein by reference.

(10z)* 1995 Stock Incentive Plan as Amended March 3, 1998 (filed as Exhibit A to the Company's Proxy
Statement dated March 16, 1998, Commission File No. 1-7006), incorporated herein by reference.

(10aa) Lease dated as of October 1, 1996, between Brush Wellman Inc. and Toledo-Lucas County Port
Authority (filed as Exhibit 10v to the Company's Form 10-K Annual Report for the year ended
December 31, 1996), incorporated herein by reference.

(10bb) Master Lease Agreement dated December 30, 1996 between Brush Wellman Inc. and National City Bank
acting for itself and as agent for certain participants (filed as Exhibit 10w to the Company's
Form 10-K Annual Report for the year ended December 31, 1996), incorporated herein by reference.

(10cc) First Amendment to Master Lease Agreement dated September 2, 1997 between Brush Wellman Inc. and
National City Bank acting for itself and as agent for certain participants (filed as Exhibit 10ee
to the Company's Form 10-K Annual Report for the year ended December 31, 1998), incorporated
herein by reference.

(10dd) Second Amendment to Master Lease Agreement and Amendment to Disbursement Schedules dated January
26, 1999 between Brush Wellman Inc. and National City Bank acting for itself and as agent for
certain participants (filed as Exhibit 10ff to the Company's Form 10-K Annual Report for the year
ended December 1, 1998), incorporated herein by reference.

(10ee)* 1997 Stock Incentive Plan for Non-Employee Directors (filed as Exhibit B to the Company's Proxy
Statement dated March 16, 1998, Commission File No. 1-7006), incorporated herein by reference.

(10ff)* Form of Employment Agreement entered into by the Company and Mr. John Grampa dated November 2,
1999.

(10gg)* Brush Wellman Inc. Executive Deferred Compensation Plan, dated September 14, 1999.

(10hh)* Trust Agreement for Brush Wellman Inc. Executive Deferred Compensation Plan, dated September 14,
1999.

(10ii) Third Amendment to Master Lease Agreement and Amendment to Disbursement Schedules dated September
30, 1999 between Brush Wellman Inc. and National City Bank acting for itself and as agent for
certain participants.

(21) Subsidiaries of the registrant.

25
28

(23) Consent of Ernst & Young LLP.

(24) Power of Attorney.

(27) Financial Data Schedule 1999.

- ---------------
* Reflects management contract or other compensatory arrangement required to be
filed as an Exhibit pursuant to Item 14(c) of this Report.

(b) REPORTS ON FORM 8-K

There were no reports on Form 8-K filed during the fourth quarter of the
year ended December 31, 1999.

26
29

SIGNATURES

Pursuant to the requirements of Section 13 of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

March 29, 2000

BRUSH WELLMAN INC.

By: /s/ GORDON D. HARNETT*
-----------------------------------------------------
Gordon D. Harnett
Chairman of the Board,
President and Chief Executive Officer

By: /s/ JOHN D. GRAMPA
-----------------------------------------------------
John D. Grampa
Vice President Finance
and Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

/s/ GORDON D. HARNETT* Chairman of the Board, March 29, 2000
- -------------------------------------------- President, Chief Executive
Gordon D. Harnett* Officer and Director
(Principal Executive Officer)

/s/ JOHN D. GRAMPA Vice President Finance and March 29, 2000
- -------------------------------------------- Chief Financial Officer
John D. Grampa (Principal Financial and
Accounting Officer)

/s/ ALBERT C. BERSTICKER* Director March 29, 2000
- --------------------------------------------
Albert C. Bersticker*

/s/ CHARLES F. BRUSH, III* Director March 29, 2000
- --------------------------------------------
Charles F. Brush, III*

/s/ DAVID L. BURNER Director March 29, 2000
- --------------------------------------------
David L. Burner

/s/ DAVID H. HOAG* Director March 29, 2000
- --------------------------------------------
David H. Hoag*

/s/ JOSEPH P. KEITHLEY Director March 29, 2000
- --------------------------------------------
Joseph P. Keithley

/s/ WILLIAM P. MADAR* Director March 29, 2000
- --------------------------------------------
William P. Madar*

/s/ ROBERT M. MCINNES Director March 29, 2000
- --------------------------------------------
Robert M. McInnes

/s/ WILLIAM R. ROBERTSON* Director March 29, 2000
- --------------------------------------------
William R. Robertson*

/s/ JOHN SHERWIN, JR.* Director March 29, 2000
- --------------------------------------------
John Sherwin, Jr.*

*The undersigned, by signing his name hereto, does sign and execute this
report on behalf of each of the above-named officers and directors of Brush
Wellman Inc., pursuant to Powers of Attorney executed by each such officer and
director filed with the Securities and Exchange Commission.

By: /s/ MICHAEL C. HASYCHAK March 29, 2000
- --------------------------------------------
Michael C. Hasychak
Attorney-in-Fact

27
30

SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
BRUSH WELLMAN INC. AND SUBSIDIARIES

YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

COL. A COL. B COL. C COL. D COL. E
- ---------------------------- -------------------- ------------------------------------ ---------- --------------
ADDITIONS
------------------------------------
(1) (2)
BALANCE AT BEGINNING CHARGED TO COSTS CHARGED TO OTHER DEDUCTION- BALANCE AT END
DESCRIPTION OF PERIOD AND EXPENSES ACCOUNTS-DESCRIBE DESCRIBE OF PERIOD
- ---------------------------- -------------------- ---------------- ----------------- ---------- --------------

YEAR ENDED DECEMBER 31, 1999
Deducted from asset
accounts:
Allowance for doubtful
accounts receivable..... $2,127,000 $ (328,043) $0 $ 54,808(A) $1,744,149
Inventory reserves and
obsolescence............ $1,740,093 $3,513,481 $0 $1,727,730(B) $3,525,844

YEAR ENDED DECEMBER 31, 1998
Deducted from asset
accounts:
Allowance for doubtful
accounts receivable..... $1,058,663 $1,090,170 $0 $ 21,833(A) $2,127,000
Inventory reserves and
obsolescence............ $2,054,938 $ 907,438 $0 $1,222,283(B) $1,740,093

YEAR ENDED DECEMBER 31, 1997
Deducted from asset
accounts:
Allowance for doubtful
accounts receivable..... $ 954,289 $ 143,666 $0 $ 39,292(A) $1,058,663
Inventory reserves and
obsolescence............ $1,717,795 $2,816,498 $0 $2,479,355(B) $2,054,938

- ---------

Note A -- Bad debts written-off, net of recoveries.

Note B -- Inventory write-off.

28
31

REPORTS OF INDEPENDENT AUDITORS AND MANAGEMENT

REPORT OF INDEPENDENT AUDITORS

Board of Directors and Shareholders
Brush Wellman Inc.

We have audited the accompanying consolidated balance sheets of Brush
Wellman Inc. and subsidiaries as of December 31, 1999 and 1998, and the related
consolidated statements of income, shareholders' equity, and cash flows for each
of the three years in the period ended December 31, 1999. Our audits also
included the financial statement schedule listed in the Index at Item 14(a).
These financial statements and schedule are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and schedule based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Brush Wellman
Inc. and subsidiaries at December 31, 1999 and 1998, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1999 in conformity with accounting principles
generally accepted in the United States. Also, in our opinion, the related
financial statement schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.

/s/ ERNST & YOUNG LLP

Cleveland, Ohio
January 24, 2000

F-1
32

CONSOLIDATED STATEMENTS OF INCOME

BRUSH WELLMAN INC. AND SUBSIDIARIES
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

1999 1998 1997
----------- ----------- -----------

Net sales........................................... $ 455,707 $ 409,892 $ 433,801
Cost of sales..................................... 363,773 325,173 324,463
----------- ----------- -----------
Gross profit........................................ 91,934 84,719 109,338
Selling, administrative, and general expenses..... 70,561 64,553 65,282
Research and development expenses................. 8,506 8,665 7,707
Other -- net...................................... 2,309 21,814 325
----------- ----------- -----------
Operating profit (loss)............................. 10,558 (10,313) 36,024
Interest expense.................................. 4,173 1,249 553
----------- ----------- -----------
Income (loss) before income taxes......... 6,385 (11,562) 35,471
Income taxes (benefit):
Currently payable................................. 555 1,147 8,506
Deferred.......................................... (609) (5,577) 1,368
----------- ----------- -----------
(54) (4,430) 9,874
----------- ----------- -----------
Net income (loss)......................... $ 6,439 $ (7,132) $ 25,597
=========== =========== ===========
Net income (loss) per share of common
stock -- basic.................................... $ 0.40 $ (0.44) $ 1.58
=========== =========== ===========
Average number of shares of common stock
outstanding -- basic.............................. 16,198,885 16,267,804 16,214,718
Net income (loss) per share of common
stock -- diluted.................................. $ 0.40 $ (0.44) $ 1.56
=========== =========== ===========
Average number of shares of common stock
outstanding -- diluted............................ 16,279,591 16,267,804 16,429,468

See notes to consolidated financial statements.

F-2
33

CONSOLIDATED STATEMENTS OF CASH FLOWS

BRUSH WELLMAN INC. AND SUBSIDIARIES
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997

1999 1998 1997
-------- -------- --------
(Dollars in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss).......................................... $ 6,439 $ (7,132) $ 25,597
Adjustments to reconcile net income (loss) to net cash
provided from Operating Activities:
Depreciation, depletion and amortization................. 20,779 21,535 18,695
Amortization of mine development......................... 6,258 3,054 634
Impairment of fixed assets and related intangibles....... -- 14,273 --
Decrease (increase) in accounts receivable............... (16,833) 2,670 (12,652)
Decrease (increase) in inventory......................... (7,641) (10,266) 3,653
Decrease (increase) in prepaid and other current
assets................................................ (6,487) (8,969) (4,001)
Increase (decrease) in accounts payable and accrued
expenses.............................................. 16,080 1,091 10,126
Increase (decrease) in interest and taxes payable........ 1,041 (1,671) (2,536)
Increase (decrease) in deferred income taxes............. 6,684 3,490 1,468
Increase (decrease) in other long-term liabilities....... (39) 1,739 962
Other -- net............................................. (1,806) (328) (1,550)
-------- -------- --------
NET CASH PROVIDED FROM OPERATING ACTIVITIES...... 24,475 19,486 40,394
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for purchase of property, plant, and equipment.... (16,758) (36,732) (53,155)
Payments for mine development.............................. (288) (433) (9,526)
Payments for acquisition of business....................... -- (12,376) --
Other investments -- net................................... 37 6,331 (1,686)
-------- -------- --------
NET CASH (USED IN) INVESTING ACTIVITIES.......... (17,009) (43,210) (64,367)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of short-term debt.................. 221 15,595 6,997
Proceeds from issuance of long-term debt................... 36,000 15,000 --
Repayment of long-term debt................................ (20,000) (800) (960)
Repayment of short-term debt............................... (17,905) (1,815) (93)
Purchase of treasury stock................................. -- (5,349) (4,927)
Issuance of common stock under stock option plans.......... 188 3,561 5,872
Payments of dividends...................................... (7,843) (7,812) (7,285)
-------- -------- --------
NET CASH PROVIDED FROM (USED IN) FINANCING
ACTIVITIES..................................... (9,339) 18,380 (396)
Effects of exchange rate changes on cash and cash
equivalents.............................................. 34 112 (210)
-------- -------- --------
NET CHANGE IN CASH AND CASH EQUIVALENTS.......... (1,839) (5,232) (24,579)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR... 1,938 7,170 31,749
-------- -------- --------
CASH AND CASH EQUIVALENTS AT END OF YEAR......... $ 99 $ 1,938 $ 7,170
======== ======== ========

See notes to consolidated financial statements.

F-3
34

CONSOLIDATED BALANCE SHEETS

BRUSH WELLMAN INC. AND SUBSIDIARIES
DECEMBER 31, 1999 AND 1998

1999 1998
--------- ----------
(DOLLARS IN THOUSANDS)

ASSETS
CURRENT ASSETS
Cash and cash equivalents................................... $ 99 $ 1,938
Accounts receivable (less allowance of $1,744 for 1999 and
$2,127 for 1998).......................................... 79,772 62,181
Inventories................................................. 110,570 103,108
Prepaid expenses............................................ 7,204 7,210
Deferred income taxes....................................... 26,610 20,087
--------- ----------
TOTAL CURRENT ASSETS.............................. 224,255 194,524
OTHER ASSETS................................................ 44,547 44,697
PROPERTY, PLANT, AND EQUIPMENT
Land........................................................ 5,875 5,426
Buildings................................................... 92,802 88,912
Machinery and equipment..................................... 298,539 282,492
Construction in progress.................................... 5,452 10,694
Allowances for depreciation................................. (254,397) (236,520)
--------- ----------
148,271 151,004
Mineral resources........................................... 5,106 5,101
Mine development............................................ 13,519 28,842
Allowances for amortization and depletion................... (11,207) (20,478)
--------- ----------
7,418 13,465
--------- ----------
PROPERTY, PLANT, AND EQUIPMENT -- NET............. 155,689 164,469
--------- ----------
$ 424,491 $ 403,690
========= ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term debt............................................. $ 34,687 $ 45,587
Accounts payable............................................ 27,731 15,156
Salaries and wages.......................................... 12,385 8,381
Taxes other than income taxes............................... 3,340 3,196
Other liabilities and accrued items......................... 14,144 14,905
Dividends payable........................................... 1,959 1,966
Income taxes................................................ 5,178 4,341
--------- ----------
TOTAL CURRENT LIABILITIES......................... 99,424 93,532
OTHER LONG-TERM LIABILITIES................................. 10,492 10,507
RETIREMENT AND POST-EMPLOYMENT BENEFITS..................... 39,430 39,448
LONG-TERM DEBT.............................................. 42,305 32,105
DEFERRED INCOME TAXES....................................... 12,202 6,287
SHAREHOLDERS' EQUITY
Serial preferred stock, no par value; 5,000,000 shares
authorized, none issued................................... -- --
Common stock, $1 par value
Authorized 45,000,000 shares; issued 22,517,363 issued
shares (22,481,321 for 1998)........................... 22,517 22,481
Additional paid-in capital.................................. 63,901 63,974
Retained income............................................. 237,893 239,230
--------- ----------
324,311 325,685
Common stock in treasury, 6,190,077 shares in 1999
(6,177,418 in 1998)....................................... (104,565) (104,050)
Other equity transactions................................... 892 176
--------- ----------
TOTAL SHAREHOLDERS' EQUITY........................ 220,638 221,811
--------- ----------
$ 424,491 $ 403,690
========= ==========

See notes to consolidated financial statements.
F-4
35

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

BRUSH WELLMAN INC. AND SUBSIDIARIES
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

ADDITIONAL COMMON OTHER
COMMON PAID-IN RETAINED STOCK IN COMPREHENSIVE
STOCK CAPITAL INCOME TREASURY INCOME OTHER TOTAL
------- ---------- -------- --------- ------------- ------- --------

BALANCES AT JANUARY 1, 1997........... $21,909 $53,650 $236,043 $ (91,357) $ 27 $(1,015) $219,257
Net income............................ 25,597 25,597
Foreign currency translation
adjustment.......................... (1,657) (1,657)
--------
Comprehensive income.................. 23,940
Declared dividends $.46 per share..... (7,463) (7,463)
Proceeds from sale of 309,196 shares
under option plans.................. 309 4,821 5,130
Income tax benefit from employees'
stock options....................... 742 742
Other equity transactions............. 9 370 (3) 113 489
Forfeiture of restricted stock........ (355) (355)
Purchase of shares for treasury....... (4,927) (4,927)
------- ------- -------- --------- ------- ------- --------
BALANCES AT DECEMBER 31, 1997......... 22,227 59,583 254,174 (96,639) (1,630) (902) 236,813
Net loss.............................. (7,132) (7,132)
Foreign currency translation
adjustment.......................... 1,563 1,563
--------
Comprehensive loss.................... (5,569)
Declared dividends $.48 per share..... (7,812) (7,812)
Proceeds from sale of 179,101 shares
under option plans.................. 179 2,875 3,054
Income tax benefit from employees'
stock options....................... 496 496
Other equity transactions............. 75 1,020 (1,471) 1,145 769
Forfeiture of restricted stock........ (591) (591)
Purchase of shares for treasury....... (5,349) (5,349)
------- ------- -------- --------- ------- ------- --------
BALANCES AT DECEMBER 31, 1998......... 22,481 63,974 239,230 (104,050) (67) 243 221,811
Net income............................ 6,439 6,439
Foreign currency translation
adjustment.......................... 59 59
--------
Comprehensive income.................. 6,498
Declared dividends $.48 per share..... (7,776) (7,776)
Proceeds from sale of 12,220 shares
under option plans.................. 12 168 180
Income tax benefit from employees'
stock options....................... 8 8
Other equity transactions............. 24 (249) (272) 657 160
Forfeiture of restricted stock........ (243) (243)
------- ------- -------- --------- ------- ------- --------
BALANCES AT DECEMBER 31, 1999......... $22,517 $63,901 $237,893 $(104,565) $ (8) $ 900 $220,638
======= ======= ======== ========= ======= ======= ========

See notes to consolidated financial statements.
F-5
36

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BRUSH WELLMAN INC. AND SUBSIDIARIES
DECEMBER 31, 1999

NOTE A -- SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION: The Company is a manufacturer of engineered materials used
in the computer and related electronics, telecommunications, automotive
electronics, industrial components, optical media, data storage, and decorative
and performance film markets. The Company also sells into the aerospace/defense
and appliance/ consumer markets. The majority of sales are to customers in North
America, Western Europe, and the Pacific Rim. The Company's Metal Systems Group
produces strip and bulk alloys (primarily copper beryllium), beryllium, and
Engineered Material Systems. The Microelectronics Group manufactures precious
and non-precious metal vapor deposition targets, other precious metals,
specialty alloys, ceramics, powder metallurgy, thick film metalization and
electronic packages. These two business segments are structured based upon
commonalties of the products manufactured and/or markets served. The Company is
vertically integrated and distributes its products through a combination of
Company-owned facilities and outside distributors and agents.

USE OF ESTIMATES: The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results may differ from those
estimates.

CONSOLIDATION: The consolidated financial statements include the accounts
of Brush Wellman Inc. and its subsidiaries, all of which are wholly-owned.
Intercompany accounts and transactions are eliminated in consolidation.

CASH EQUIVALENTS: All highly liquid investments with a put option or
maturity of three months or less when purchased are considered to be cash
equivalents.

INVENTORIES: Inventories are stated at the lower of cost or market. The
cost of domestic inventories except ore and supplies is principally determined
using the last-in, first-out (LIFO) method. The remaining inventories are stated
principally at average cost.

PROPERTY, PLANT, AND EQUIPMENT: Property, plant, and equipment is stated
on the basis of cost. Depreciation is computed principally by the straight-line
method, except certain facilities for which depreciation is computed by the
sum-of-the-years digits or units-of-production method. Depreciable lives that
are used in computing the annual provision for depreciation by class of asset
are as follows:

YEARS
-------------

Land improvements........................................... 5 to 25
Buildings................................................... 10 to 40
Leasehold improvements...................................... Life of lease
Machinery and equipment..................................... 3 to 15
Furniture and fixtures...................................... 4 to 15
Automobiles and trucks...................................... 2 to 8
Research equipment.......................................... 6 to 12
Computer hardware........................................... 3 to 10

Depreciation expense was $18,438,000 in 1999, $20,708,000 in 1998, and
$18,128,000 in 1997.

The Company adopted the provisions of Statement of Position 98-1,
"Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use," in 1999. The impact of this adoption on the Company's financial
statements was not significant. Computer software, which is included in Other
Assets on the Consolidated Balance Sheets, is amortized over three to ten years.

F-6
37
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BRUSH WELLMAN INC. AND SUBSIDIARIES -- (CONTINUED)

MINERAL RESOURCES AND MINE DEVELOPMENT: Property acquisition costs and
mining costs associated with waste rock removal are recorded at cost and are
depleted or amortized by the units-of-production method based on recoverable
proven beryllium reserves. Exploration and pre-production mine development
expenses are charged to operations in the period in which they are incurred.

INTANGIBLE ASSETS: The cost of intangible assets is amortized by the
straight-line method over the periods estimated to be benefited, which is
generally twenty years or less.

ASSET IMPAIRMENT: In the event that facts and circumstances indicate that
the carrying value of long-lived and intangible assets may be impaired, an
evaluation of recoverability would be performed. If an evaluation is required,
the estimated future undiscounted cash flow associated with the asset would be
compared to the asset's carrying amount to determine if a write-down may be
required.

DERIVATIVES: The Company uses derivatives to manage its foreign currency,
interest rate, and commodity price exposures. Forward foreign exchange currency
contracts that do not qualify for hedge accounting treatment are
marked-to-market using the applicable rates and any unrealized gains and losses
are taken to income. Realized gains and losses on forward contracts, swaps, and
options are taken to income when the financial instrument matures. Gains and
losses on foreign currency derivative contracts are recorded in Other-net while
gains and losses on commodity derivative contracts are recorded in Cost of
sales. Gains and losses on interest rate derivatives are recorded in Cost of
sales or Interest expense depending upon the nature of the underlying hedged
transaction. The outstanding commodity and interest rate derivatives qualify for
hedge accounting treatment. Option premiums are classified as prepaid expenses
and amortized over the term of the option.

In June 1998, the Financial Accounting Standards Board issued Statement No.
133, "Accounting for Derivative Instruments and Hedging Activities," which is
required to be adopted in years beginning after June 15, 2000. The Statement
permits early adoption as of the beginning of any fiscal quarter after its
issuance. The Statement will require the Company to recognize all derivatives on
the balance sheet at fair value. Derivatives that are not hedges must be
adjusted to fair value through income. If the derivative is a hedge, depending
on the nature of the hedge, changes in the fair value of derivatives will either
be offset against the change in fair value of the hedged assets, liabilities, or
firm commitments through earnings or recognized in other comprehensive income
until the hedged item is recognized in earnings. The ineffective portion of a
derivative's change in fair value will be immediately recognized in earnings.
The Company has not yet determined when it will adopt the Statement nor has it
determined what the effect of the Statement will be on earnings and the
financial position of the Company.

REVENUE RECOGNITION: The Company recognizes revenue when goods are shipped
and title passes to the customer.

ADVERTISING COSTS: The Company expenses all advertising costs as incurred.
Advertising costs were immaterial for the years presented in the consolidated
financial statements.

EXCHANGE GAIN(LOSS): Included in Other-net in the Consolidated Statements
of Income is an exchange gain(loss) of $2,240,000 in 1999, ($1,752,000) in 1998,
and $2,275,000 in 1997.

INCOME TAXES: The Company uses the liability method as required by
Statement of Financial Accounting Standards (SFAS) No. 109 in measuring the
provision for income taxes and recognizing deferred tax assets and liabilities
on the balance sheet.

RECLASSIFICATION: Certain amounts in prior years have been reclassified to
conform with the 1999 consolidated financial statement presentation.

NET INCOME PER SHARE: Basic earnings per share (EPS) is computed by
dividing income available to common stockholders by the weighted average number
of common shares outstanding for the period. Diluted

F-7
38
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BRUSH WELLMAN INC. AND SUBSIDIARIES -- (CONTINUED)

EPS reflects the assumed conversion of all dilutive common stock equivalents as
appropriate under the treasury stock method.

NOTE B -- ACQUISITIONS

At the end of the second quarter of 1998, the Company acquired certain
assets of Pure Tech Inc. for cash. The transaction was accounted for as a
purchase and did not have a material impact on operations.

NOTE C -- INVENTORIES

Inventories in the consolidated balance sheets are summarized as follows:

DECEMBER 31,
----------------------
1999 1998
--------- ---------
(DOLLARS IN THOUSANDS)

Principally average cost:
Raw materials and supplies................................ $ 20,520 $ 18,708
In process................................................ 73,192 60,919
Finished goods............................................ 39,634 42,021
-------- --------
Gross inventories...................................... 133,346 121,648
Excess of average cost over LIFO
Inventory value........................................... 22,776 18,540
-------- --------
Net inventories........................................... $110,570 $103,108
======== ========

Average cost approximates current cost. Gross inventories accounted for
using the LIFO method total $100,529,000 at December 31, 1999 and $92,715,000 at
December 31, 1998.

NOTE D -- INTEREST

Interest expense associated with active construction and mine development
projects is capitalized and amortized over the future useful lives of the
related assets. Interest paid was $4,534,000, $2,732,000, and $2,560,000 in
1999, 1998, and 1997, respectively. Interest costs capitalized and the amounts
amortized are as follows:

DECEMBER 31,
--------------------------
1999 1998 1997
------ ------ ------
(DOLLARS IN THOUSANDS)

Interest incurred........................................ $4,302 $2,829 $2,371
Less capitalized interest................................ 129 1,580 1,818
------ ------ ------
$4,173 $1,249 $ 553
====== ====== ======
Amortization, included principally in cost of sales...... $ 880 $ 697 $ 600
====== ====== ======

In 1986, the Company purchased company-owned life insurance policies
insuring the lives of certain United States employees. The contracts are
recorded at cash surrender value, net of policy loans, in Other Assets. The net
contract (income) expense, including interest expense recorded in Selling,
Administrative, and General expenses, was ($283,000), $580,000 and $1,075,000 in
1999, 1998, and 1997, respectively. The related interest expense was $2,404,000,
$2,966,000, and $3,081,000, respectively.

F-8
39
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BRUSH WELLMAN INC. AND SUBSIDIARIES -- (CONTINUED)

NOTE E -- DEBT

A summary of long-term debt follows:

DECEMBER 31
----------------------
1999 1998
--------- ---------
(DOLLARS IN THOUSANDS)

9.68% medium-term notes, payable in 2000.................... $ 5,000 $ 5,000
Variable rate demand bonds payable in installments beginning
in 2005................................................... 3,000 3,000
5.45% -- 6.45% industrial development revenue bonds payable
in equal installments through 2000........................ 800 1,600
Variable rate industrial development revenue bonds payable
in 2016................................................... 8,305 8,305
Revolving credit agreement.................................. 31,000 15,000
------- -------
48,105 32,905
Current portion of long-term debt........................... (5,800) (800)
------- -------
$42,305 $32,105
======= =======

Maturities on long-term debt instruments as of December 31, 1999 are as
follows:

(DOLLARS IN
THOUSANDS)

2000........................................................ $ 5,800
2001........................................................ 0
2002........................................................ 31,000
2003........................................................ 0
2004........................................................ 0
Thereafter.................................................. 11,305
-------
$48,105
=======

The Company has a revolving credit agreement with five banks which provide
a maximum availability of $55,000,000 through January, 2002. At December 31,
1999, there is $31,000,000 in borrowings outstanding against this agreement at
an average rate of 7.85% that is fixed through January, 2000 at which time it
will be reset according to the terms and options available to the Company under
the agreement. The agreement allows the Company to borrow money at a premium
over LIBOR or prime rate and at varying maturities.

The following table summarizes the Company's short-term lines of credit.
Amounts shown as outstanding are included in short-term debt on the Consolidated
Balance Sheets.

DECEMBER 31, 1999
---------------------------------
TOTAL OUTSTANDING AVAILABLE
------- ----------- ---------
(DOLLARS IN THOUSANDS)

Domestic................................................ $ 5,000 $ 800 $ 4,200
Foreign................................................. 34,851 21,169 13,682
Precious Metal.......................................... 6,918 6,918 --
------- ------- -------
Total.............................................. $46,769 $28,887 $17,882
======= ======= =======

F-9
40
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BRUSH WELLMAN INC. AND SUBSIDIARIES -- (CONTINUED)

DECEMBER 31, 1998
---------------------------------
TOTAL OUTSTANDING AVAILABLE
------- ----------- ---------
(DOLLARS IN THOUSANDS)

Domestic................................................ $20,000 $12,423 $ 7,577
Foreign................................................. 37,903 25,544 12,359
Precious Metal.......................................... 6,844 6,820 24
------- ------- -------
Total.............................................. $64,747 $44,787 $19,960
======= ======= =======

The domestic and foreign lines are uncommitted, unsecured, and renewed
annually. The precious metal facility (primarily gold) is secured and renewed
annually. Also included in short-term debt at December 31, 1999 is $800,000
representing the current maturity of an industrial development revenue bond and
$5,000,000 representing the current maturity of a medium-term note. The average
interest rate on short-term debt was 3.68% and 3.70% as of December 31, 1999 and
1998, respectively.

The Company has a private placement agreement whereby the Company can issue
up to an aggregate of $75,000,000 of medium-term notes ($5,000,000 outstanding
at December 31, 1999). The notes bear a fixed interest rate and may have
maturities from nine months to thirty years from date of issue as agreed upon in
each case by the purchaser and the Company.

In November, 1996, the Company entered into an agreement with the Lorain
Port Authority, Ohio to issue $8,305,000 in variable rate industrial revenue
bonds, maturing in 2016. The variable rate ranged from 2.44% to 5.71% during
1999 and from 3.09% to 4.64% during 1998.

In 1994, the Company re-funded its $3,000,000 industrial development
revenue bonds. The 7.25% bonds were re-funded into variable rate demand bonds.
The variable rate ranged from 2.30% to 5.55% during 1999 and from 2.95% to 4.45%
during 1998. In December 1995, the Company entered into an interest rate swap
agreement to manage its interest rate exposure on the $3,000,000 variable rate
demand bond. The Company converted the variable rate to a fixed rate of 6.03%
under the interest rate swap agreement that matures in 2002.

The loan agreements include certain restrictive covenants covering the
incurrence of additional debt, interest coverage, and maintenance of working
capital, tangible net worth (as defined), and debt to earnings ratio. The most
restrictive covenant is the funded debt to earnings before interest, taxes,
depreciation, and amortization (EBITDA) ratio. In January, 1999 and September
1999, the Company revised certain provisions of its revolving credit agreement
and a master lease agreement (see Note F to the Consolidated Financial
Statements), including the funded debt to EBITDA ratio.

NOTE F -- LEASING ARRANGEMENTS

The Company leases warehouse and manufacturing space, and manufacturing and
computer equipment under operating leases with terms ranging up to 25 years.
Rent expense amounted to $10.5 million, $6.8 million, and $4.3 million during
1999, 1998, and 1997, respectively. The future estimated minimum lease payments
under non-cancelable operating leases with initial lease terms in excess of one
year at December 31, 1999, are as follows: 2000 -- $9.1 million; 2001 -- $8.9
million; 2002 -- $4.2 million; 2003 -- $4.1 million; 2004 -- $3.9 million; and
thereafter -- $19.9 million.

The Company has operating leases for a production facility and certain
equipment located in that facility. The facility and related equipment are owned
by third parties and cost approximately $80.0 million. Start-up of this facility
began in the fourth quarter of 1997. Lease payments for the facility continue
through 2011 with options for renewal. Lease payments for the related equipment
began in 1999 and continue through the initial lease term expiring in 2001. The
Company has options to renew the lease of the equipment for seven one-year
periods and to purchase the equipment for its estimated fair value at the end of
each term. The lease provides

F-10
41
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BRUSH WELLMAN INC. AND SUBSIDIARIES -- (CONTINUED)

for a substantial residual value guarantee by the Company at the termination of
the lease. The estimated minimum payments under these leases are included in the
preceding paragraph.

The lease agreements include restrictive covenants covering certain
liquidity ratios, maintenance of tangible net worth (as defined), and maximum
rental expenses. In January and September of 1999, the Company amended certain
provisions of its master lease agreement, including its covenant regarding the
funded debt to earnings before interest, taxes, depreciation, and amortization
(EBITDA) ratio.

NOTE G -- DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE INFORMATION

The Company is exposed to commodity price, interest rate, and foreign
currency exchange rate differences and attempts to minimize the effects of these
exposures through a combination of natural hedges and the use of derivative
financial instruments. The following table summarizes the fair value of the
Company's outstanding derivatives and debt as of December 31, 1999 and December
31, 1998.

DECEMBER 31, 1999 December 31, 1998
------------------------------ -------------------------------
NOTIONAL CARRYING FAIR NOTIONAL CARRYING FAIR
AMOUNT AMOUNT VALUE AMOUNT AMOUNT VALUE
-------- -------- ------ -------- -------- -------
(DOLLARS IN THOUSANDS)

FOREIGN CURRENCY CONTRACTS
Forward Contracts
Yen........................... $ 12,100 $(887) $ (887) $ 7,800 $(136) $ (136)
Deutschmark................... 8,800 276 276 13,300 (593) (593)
Pound Sterling................ 300 (8) (8) 4,200 (9) (9)
-------- ----- ------ -------- ----- -------
Total...................... $ 21,200 $(619) $ (619) $ 25,300 $(738) $ (738)
======== ===== ====== ======== ===== =======
Options
Yen........................... $ 22,400 -- $ (487) $ 9,700 -- $ (137)
Deutschmark................... 8,600 -- 97 9,800 -- 143
Pound Sterling................ 4,000 -- (7) -- -- --
-------- ----- ------ -------- ----- -------
Total...................... $ 35,000 -- $ (397) $ 19,500 -- $ 6
======== ===== ====== ======== ===== =======
COMMODITY SWAPS
Floating To Fixed............... $ 1,610 -- $ 165 $ 8,100 -- $(1,200)
INTEREST RATE SWAPS
Floating To Fixed............... $118,700 -- $1,678 $118,700 -- $(4,308)

SFAS No. 107 defines fair value as the amount at which an instrument could
be exchanged in a current transaction between willing parties other than in a
forced or liquidation sale. The fair value of the forward contracts, options,
and swaps was calculated using the applicable market rates at December 31, 1999
and December 31, 1998.

FOREIGN EXCHANGE HEDGE CONTRACTS

The Company uses forward and option contracts to hedge anticipated foreign
currency transactions, primarily foreign sales. The purpose of the program is to
protect against the reduction in value of the foreign currency transactions from
adverse exchange rate movements. Should the dollar strengthen significantly, the
decrease in the translated value of the foreign currency transactions should be
partially offset by gains on the hedge contracts. Depending upon the method
used, the contract may limit the benefits from a weakening of the dollar. All
contracts mature in two years or less from the date of issuance.

F-11
42
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BRUSH WELLMAN INC. AND SUBSIDIARIES -- (CONTINUED)

COMMODITY SWAPS

The Company purchases and manufactures products containing copper.
Purchases are exposed to price fluctuations in the copper market. However, for
the majority of its copper-based products, the Company will adjust its selling
prices to customers to reflect the change in its copper purchase price. This
program is designed to be profit neutral; i.e., any changes in copper prices,
either up or down, will be directly passed on to the customer.

The Company uses commodity swaps to hedge the copper purchase price for
those volumes where price fluctuations cannot be passed on to the customer.
Under these swaps, which are purchased from financial institutions, the Company
makes or receives payments based on a difference between a fixed price (as
specified in each individual contract) and the market price of copper. These
payments will offset the change in prices of the underlying purchases and
effectively fix the price of copper at the swap rate for the contracted volume.

INTEREST RATE SWAPS

In December, 1996, the Company entered into an interest rate swap agreement
to hedge the variable rate payments to be made during the initial term of an
equipment lease (see Note F to the Consolidated Financial Statements). The
Company has accounted for the swap as a hedge, effectively fixing the estimated
lease payments through the initial lease term. The maximum notional amount
covered by this contract is $60.9 million.

In February, 1998, the Company entered into an interest rate swap agreement
to hedge the variable rate payments on the equipment lease mentioned above for
the remaining terms of the lease. The Company has accounted for the swap as a
hedge, effectively fixing the estimated lease payments through the entire term
of the lease. The maximum notional amount covered by this contract is $54.8
million.

In December, 1995, the Company entered into an interest rate swap,
converting to a fixed rate from a variable rate on a $3,000,000 industrial
revenue development bond.

DEBT

The fair value of the Company's debt was estimated using a discounted cash
flow analysis based on the Company's current incremental borrowing rates for
similar types of borrowing arrangements. Using this procedure, the fair value of
the Company's debt approximates the carrying value as of December 31, 1999 and
December 31, 1998.

NOTE H -- CAPITAL STOCK

The Company has 5,000,000 shares of Serial Preferred Stock authorized (no
par value), none of which has been issued. Certain terms of the Serial Preferred
Stock, including dividends, redemption, and conversion will be determined by the
Board of Directors prior to issuance.

On January 27, 1998, the Company's Board of Directors adopted a new share
purchase rights plan and declared a dividend distribution of one right for each
share of Common Stock outstanding as of the close of business on February 9,
1998. The plan allows for new shares issued after February 9, 1998 to receive
one right subject to certain limitations and exceptions. Each right entitles the
shareholder to buy one one-hundredth of a share of Serial Preferred Stock,
Series A, at an initial exercise price of $110. There are 450,000 unissued
shares of Serial Preferred Stock which will be designated as Series A Preferred
Stock. Each share of Series A Preferred Stock will be entitled to participate in
dividends on an equivalent basis with one hundred shares of Common Stock. Each
share of Series A Preferred Stock will be entitled to one vote. The rights will
not be exercisable and will not be evidenced by separate right certificates
until a specified time after any person or

F-12
43
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BRUSH WELLMAN INC. AND SUBSIDIARIES -- (CONTINUED)

group acquires beneficial ownership of 20% or more (or announces a tender offer
for 20% or more) of Brush Wellman Common Stock. The rights expire on January 27,
2008, and can be redeemed for 1 cent per right under certain circumstances.

In May, 1997, the Company's Board of Directors authorized the repurchase of
up to 1,000,000 shares of its Common Stock (not to exceed 250,000 shares per
year) over a four-year period. Through December 31, 1999, the Company
repurchased 455,600 shares at a total cost of $10.3 million.

The amended 1995 Stock Incentive Plan authorizes the granting of five
categories of incentive awards: option rights, performance restricted shares,
performance shares, performance units, and restricted shares. As of December 31,
1999, no performance units have been granted.

Option rights entitle the optionee to purchase common shares at a price
equal to or greater than market value on the date of grant. Option rights
outstanding under the amended 1995 Stock Incentive Plan and previous plans
generally become exercisable over a four-year period and expire ten years from
the date of the grant. In 1995, the Company's right to grant options on a total
of 228,565 shares (under the Company's 1979, 1984, and 1989 stock option plans)
was terminated upon shareholder approval of the amended 1995 Stock Incentive
Plan. No further stock awards will be made under the Company's 1979, 1984, and
1989 stock option plans except to the extent that shares become available for
grant under these plans by reason of termination of options previously granted.

The 1990 Stock Option Plan for Non-employee Directors (the "1990 Plan") was
terminated effective May 7, 1998. The 1997 Stock Incentive Plan for Non-employee
Directors replaced the 1990 Plan and provides for a one-time grant of 5,000
options to up to six new non-employee directors who have not yet received
options under the 1990 Plan at an option price equal to the fair market value of
the shares at the date of the grant. Options are non-qualified and become
exercisable six months after the date of grant. The options generally expire ten
years after the date they were granted.

F-13
44
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BRUSH WELLMAN INC. AND SUBSIDIARIES -- (CONTINUED)

Stock option, performance restricted share award, performance share award,
and restricted share award activities are summarized in the following table:

1999 1998 1997
-------------------- -------------------- --------------------
WEIGHTED Weighted Weighted
NUMBER AVERAGE NUMBER AVERAGE NUMBER AVERAGE
OF EXERCISE OF EXERCISE OF EXERCISE
SHARES PRICE SHARES PRICE SHARES PRICE
--------- -------- --------- -------- --------- --------

STOCK OPTIONS:
Outstanding at beginning of year........ 1,274,043 $18.57 1,345,384 $17.62 1,544,570 $18.12
Granted................................. 249,225 14.69 200,650 26.30 217,550 18.39
Exercised............................... (12,220) 14.74 (179,101) 17.35 (309,696) 16.65
Canceled................................ (187,140) 20.85 (92,890) 24.18 (107,040) 28.79
--------- --------- ---------
Outstanding at end of year.............. 1,323,908 17.60 1,274,043 18.57 1,345,384 17.62
Exercisable at end of year.............. 1,088,703 17.37 1,070,653 17.85 1,141,774 17.58
PERFORMANCE RESTRICTED AWARDS:
Awarded and restricted at beginning of
year.................................. 60,450 89,815 89,815
Awarded during the year................. -- 60,450 --
Vested.................................. -- (6,210) --
Forfeited............................... (5,388) (83,605) --
--------- --------- ---------
Awarded and restricted at end of year... 55,062 60,450 89,815
PERFORMANCE AWARDS:
Allocated at beginning of year.......... 109,947 118,127 118,127
Allocated during the year............... -- 30,225 --
Issued.................................. (1,722) -- --
Forfeited............................... (2,694) (38,405) --
--------- --------- ---------
Allocated at end of year................ 105,531 109,947 118,127
RESTRICTED AWARDS:
Awarded and restricted at beginning of
year.................................. 49,738 34,638 26,838
Awarded during the year................. 22,100 16,900 9,000
Vested.................................. -- -- --
Forfeited............................... (3,400) (1,800) (1,200)
--------- --------- ---------
Awarded and restricted at end of year... 68,438 49,738 34,638

The market value of the performance restricted shares and the performance
shares is adjusted for management's expectation of reaching the Management
Objectives as outlined in the plan agreement, and the related dividends on the
performance restricted shares have been recorded as deferred
compensation-restricted stock and are a component of other equity transactions
of shareholders' equity. Deferred compensation is amortized over the vesting
period. Amounts recorded against selling, administrative, and general expenses
totaled $10,000 in 1999, $160,000 in 1998 and $458,000 in 1997.

F-14
45
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BRUSH WELLMAN INC. AND SUBSIDIARIES -- (CONTINUED)

The following table provides additional information about stock options
outstanding as of December 31, 1999:

OPTIONS OUTSTANDING OPTIONS EXERCISABLE
------------------------------------ ----------------------
WEIGHTED
AVERAGE WEIGHTED WEIGHTED
REMAINING AVERAGE AVERAGE
RANGE OF NUMBER CONTRACTUAL EXERCISE NUMBER EXERCISE
OPTION PRICES OUTSTANDING LIFE PRICE EXERCISABLE PRICE
---------------- ----------- ----------- -------- ----------- --------

$11.81 to $15.75 643,560 5.74 $14.69 528,810 $14.69
$16.06 to $19.81 456,073 5.38 17.63 394,433 17.53
$20.25 to $26.72 224,275 7.22 25.88 165,460 25.58
--------- ---- ------ --------- ------
1,323,908 5.86 $17.60 1,088,703 $17.37
========= ==== ====== ========= ======

The weighted-average remaining contractual life of options outstanding at
December 31, 1998 and 1997 is 5.58 years and 5.45 years, respectively. The
number of shares available for future grants as of December 31, 1999, 1998, and
1997 is 824,636 shares, 897,297 shares, and 194,757 shares, respectively.

The Company has adopted the disclosure-only provisions of SFAS No. 123,
"Accounting for Stock Based Compensation" but applies APB Opinion No. 25 and
related interpretation in accounting for its stock incentive plans. If the
Company had elected to recognize compensation expense for its stock incentive
plan awards based on the estimated fair value of the awards on the grant dates
consistent with the method prescribed by SFAS No. 123 by amortizing the expense
over the options' vesting period, the pro forma net income and earnings per
share (E.P.S.) would have been as noted below:

1999 1998 1997
---------- ----------- -----------
(Dollars in thousands except per share
amounts)

Net income (loss)........................ As reported $6,439 $(7,132) $25,597
Pro Forma 5,307 (7,973) 25,113
Basic E.P.S. ............................ As reported 0.40 (0.44) 1.58
Pro Forma 0.33 (0.49) 1.55
Diluted E.P.S. .......................... As reported 0.40 (0.44) 1.56
Pro Forma 0.33 (0.49) 1.53

- ---------------
Note: The pro forma disclosures shown are not representative of the effects on
net income and earnings per share in future years.

The weighted-average fair value of the Company's stock options used to
compute the pro forma net income and earnings per share disclosures is $3.96,
$7.13, and $4.99 for 1999, 1998, and 1997, respectively. The fair value is the
estimated present value at grant date using the Black-Scholes option-pricing
model with the following weighted-average assumptions for the various grants in
1999, 1998 and 1997:

1999 1998 1997
------- ------- -------

Risk-free interest rate................................. 4.77% 5.65% 6.15%
Dividend yield.......................................... 3.04% 2.33% 2.00%
Volatility of stock..................................... 30.40% 31.60% 29.90%
Expected life of option................................. 6 YEARS 4 years 4 years

The dividend yield is a function of dividends declared and the annual
average stock price.

F-15
46
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BRUSH WELLMAN INC. AND SUBSIDIARIES -- (CONTINUED)

NOTE I - SPECIAL CHARGE

The Company recorded a special charge totaling $22.6 million pre-tax and
$16.5 million after tax in 1998, primarily for write-downs of property, plant
and equipment, inventory and goodwill and increases to environmental reserves.
Of the $22.6 million, $5.6 million was charged to Cost of sales and $17.0
million was charged to Other-net in the Consolidated Statements of Income for
the year ended December 31, 1998. The charge recorded against Other-net
consisted of an asset impairment, an increase to the environmental reserve and
an increase in the allowance for doubtful accounts. The Company recorded $21.8
million of the pre-tax charge in the second quarter with the balance recorded in
the third and fourth quarters.

The Company completed an update of its long-term strategic plans in the
second quarter of 1998. The updated outlook for the market opportunities for
various product lines, limited success in developing new applications and slower
than desired progress toward achieving prior plans indicated to management that
its future growth expectations for certain of its businesses needed to be
lowered. As a result, management proposed, and the Board of Directors approved,
restrictions on future capital investments in product lines with limited growth
potential and the abandonment of various product offerings. This caused
management to believe it was necessary to evaluate the recoverability of certain
of its long-lived assets in accordance with paragraphs 4 and 5 of SFAS No. 121.
The evaluation in the second quarter 1998 indicated that the future cash flows
on an undiscounted basis were less than the carrying value of various long-lived
assets and, therefore, the assets were impaired. Property, plant and equipment
and related intangibles with a carrying value of $19.6 million were written down
by $14.3 million to their estimated fair market value. The impaired assets are
being held for future use.

In the second quarter 1998, the Company's environmental engineers, working
in conjunction with environmental consultants, concluded that additional
remediation work would be required to redevelop land owned by the Company that
had been used for the manufacturing operations of a former subsidiary. This
property, which was written off after the subsidiary's operations were sold in
1986, is being held by the Company as vacant, unused land. The consultants and
the Company believed that this work could be pursued under the State of Ohio's
Voluntary Action Program (VAP) and determined the best estimate of the probable
cost to be $2.1 million. Under a VAP, which was enacted into law by the State of
Ohio in 1996, the property owner and the Ohio EPA may agree to a remediation
plan through a process which is often shorter and less costly than the lengthy
EPA review process. Upon the completion of this work in the second quarter of
1998, the Company's senior management team and the Board of Directors agreed
that a VAP proposal would be submitted and, as a result, the $2.1 million
reserve was established. A formal VAP proposal was subsequently developed and
presented to the Ohio EPA.

As part of the special charge in 1998, the allowance for doubtful accounts
was increased by $0.6 million for a specific severely delinquent receivable. The
Company continued to pursue collection of this receivable and the customer
ultimately paid the past due amounts, resulting in the reversal of this
provision in 1999.

The $5.6 million charge to Cost of sales in 1998 consisted of a $2.9
million inventory writedown as a result of management's decision in the second
quarter 1998 to discontinue the manufacturing and marketing of various products,
accelerated depreciation of $1.6 million on equipment scheduled to be taken out
of service and deferred manufacturing costs of $1.1 million associated with the
equipment to be abandoned or the manufacturing of products to be discontinued.

F-16
47
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BRUSH WELLMAN INC. AND SUBSIDIARIES -- (CONTINUED)

NOTE J - INCOME TAXES

Income (loss) before income taxes and income taxes (benefit) are comprised
of the following components, respectively:

1999 1998 1997
------ -------- -------
(Dollars in thousands)

Income (loss) before income taxes:
Domestic............................................ $4,983 $(12,730) $30,993
Foreign............................................. 1,402 1,168 4,478
------ -------- -------
Total before income taxes................... $6,385 $(11,562) $35,471
====== ======== =======
Income taxes(benefit):
Current income taxes:
Domestic......................................... $ (54) $ 442 $ 5,982
Foreign.......................................... 609 705 2,524
------ -------- -------
Total current............................... 555 1,147 8,506
Deferred income taxes:
Domestic......................................... $ (183) $ (5,363) $ 1,373
Foreign.......................................... (426) (214) (5)
------ -------- -------
Total deferred.............................. (609) (5,577) 1,368
Total income taxes.......................... $ (54) $ (4,430) $ 9,874
====== ======== =======

A reconciliation of the federal statutory and effective income tax rates
follows:

1999 1998 1997
----- ----- ----

Federal statutory rate...................................... 34.0% (34.0)% 35.0%
State and local income taxes, net of federal tax effect..... 1.8 1.3 1.7
Effect of excess of percentage depletion over cost
depletion................................................. (18.8) (14.7) (5.5)
Company-owned life insurance................................ (1.3) (4.3) (1.5)
Research and experimentation tax credit..................... (16.3) -- (0.5)
Difference due to book and tax basis of assets of acquired
businesses................................................ 0.3 14.2 0.4
Taxes on foreign income -- net.............................. (9.4) (3.6) (1.2)
Valuation allowance......................................... 5.5 -- --
Other items................................................. 3.4 2.8 (0.6)
----- ----- ----
Effective tax rate..................................... (0.8)% (38.3)% 27.8%
===== ===== ====

Included in domestic income taxes currently payable, as shown in the
Consolidated Statements of Income, are $170,000, $234,000, and $935,000 of state
and local income taxes in 1999, 1998, and 1997, respectively.

The Company had domestic and foreign income tax payments (refunds), of
$(290,000), $1,650,000, and $10,507,000 in 1999, 1998, and 1997, respectively.

F-17
48
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BRUSH WELLMAN INC. AND SUBSIDIARIES -- (CONTINUED)

Under Statement 109, deferred tax assets and liabilities are determined
based on temporary differences between the financial reporting bases and the tax
bases of assets and liabilities. Deferred tax assets and (liabilities) recorded
in the consolidated balance sheets consist of the following at December 31:

1999 1998
--------- ---------
(Dollars in thousands)

Postretirement benefits other than pensions................. $ 12,384 $ 12,476
Alternative minimum tax credit.............................. 18,451 11,691
Other reserves.............................................. 7,612 8,094
Environmental reserves...................................... 2,738 2,684
Inventory................................................... 1,417 1,893
Tax credit carryfoward...................................... 1,041 --
Net operating loss carryfoward.............................. 350 --
Miscellaneous............................................... 376 265
-------- --------
44,369 37,103
Valuation allowance......................................... (350) --
-------- --------
Total deferred tax assets................................... $ 44,019 $ 37,103

Depreciation................................................ (21,880) (14,562)
Pensions.................................................... (3,616) (3,968)
Mine development............................................ (1,868) (3,444)
Capitalized interest expense................................ (2,247) (1,329)
-------- --------
Total deferred tax liabilities.............................. (29,611) (23,303)
-------- --------
Net deferred tax asset...................................... $ 14,408 $ 13,800
======== ========

At December 31, 1999, for income tax purposes, the Company had domestic net
operating loss carryforwards of $4,684,000 that expire in the year 2019. The
Company also had foreign net operating loss carryforwards of $869,000 for income
tax purposes that expire in the year 2004. For financial reporting purposes, a
valuation allowance of $350,000 on the foreign net operating loss has been
recognized to offset the deferred tax assets related to those carryforwards.

At December 31, 1999, the Company had domestic tax credit carryforwards of
$1,041,000 that are scheduled to expire in the year 2018.

F-18
49
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BRUSH WELLMAN INC. AND SUBSIDIARIES -- (CONTINUED)

NOTE K -- EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted
earnings (loss) per share (E.P.S.):

1999 1998 1997
------------ ----------- -----------

Numerator for basic and diluted E.P.S.:
Net income (loss).......................... $ 6,439,000 $(7,132,000) $25,597,000
Denominator:
Denominator for basic E.P.S.:
Weighted-average shares outstanding..... 16,198,885 16,267,804 16,214,718
Effect of dilutive securities:
Employee stock options.................. 28,420 -- 194,189
Performance restricted stock............ -- -- 18,680
Special restricted stock................ 52,286 -- 1,881
------------ ----------- -----------
Diluted potential common shares......... 80,706 -- 214,750
------------ ----------- -----------
Denominator for diluted E.P.S.:
Adjusted weighted-average shares
outstanding........................... 16,279,591 16,267,804 16,429,468
============ =========== ===========
Basic E.P.S. .............................. $ 0.40 $ (0.44) $ 1.58
============ =========== ===========
Diluted E.P.S. ............................ $ 0.40 $ (0.44) $ 1.56
------------ ----------- -----------

Under SFAS No. 128, "Earnings per Share," no potential common shares shall
be included in the computation of any diluted per-share amount when a loss from
continuing operations exists. Accordingly, dilutive securities totaling
approximately 157,000 shares have been excluded from the 1998 diluted E.P.S.
calculation.

Options to purchase Common Stock with exercise prices in excess of the
average share price totaling 680,348 at December 31, 1999, 374,350 at December
31, 1998, and 130,500 at December 31, 1997 were excluded from the diluted E.P.S.
calculations as their effect would have been anti-dilutive.

F-19
50
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BRUSH WELLMAN INC. AND SUBSIDIARIES -- (CONTINUED)

NOTE L -- PENSIONS AND OTHER POSTRETIREMENT BENEFITS

PENSION BENEFITS OTHER BENEFITS
-------------------- --------------------
1999 1998 1999 1998
-------- -------- -------- --------
(DOLLARS IN THOUSANDS)

CHANGE IN BENEFIT OBLIGATION
Benefit obligation at end of prior year......... $ 84,794 $ 71,668 $ 31,330 $ 30,775
Service cost.................................... 3,649 3,063 362 345
Interest cost................................... 5,843 5,154 2,114 2,122
Amendments...................................... 8 5,025 (1,355) --
Actuarial (gain) loss........................... (11,624) 3,552 1,339 274
Benefit payments................................ (5,756) (3,668) (2,586) (2,186)
-------- -------- -------- --------
Benefit obligation at end of year............... $ 76,914 $ 84,794 $ 31,204 $ 31,330
-------- -------- -------- --------
CHANGE IN PLAN ASSETS
Fair value of plan assets at end of prior
year.......................................... $110,037 $ 96,372 -- --
Actual return on plan assets.................... 10,140 17,316 -- --
Employer contributions.......................... 24 17 $ 2,586 $ 2,186
Plan participants contributions................. -- -- -- --
Benefit payments................................ (5,756) (3,668) (2,586) (2,186)
-------- -------- -------- --------
Fair value of plan assets at end of year........ $114,445 $110,037 -- --
-------- -------- -------- --------
Funded status................................... $ 37,531 $ 25,243 $(31,204) $(31,330)
Unrecognized net actuarial (gain) loss.......... (32,465) (19,989) (3,889) (5,386)
Unrecognized prior service cost................. 7,337 7,984 (1,355) --
Unrecognized initial net (asset) obligation..... (1,894) (2,601) -- --
-------- -------- -------- --------
Net amount recognized........................... $ 10,509 $ 10,637 $(36,448) $(36,716)
======== ======== ======== ========
AMOUNTS RECOGNIZED IN THE CONSOLIDATED BALANCE
SHEET CONSIST OF:
Prepaid benefit cost............................ $ 13,417 $ 12,988 -- --
Accrued benefit liability....................... (2,908) (2,351) (36,448) (36,716)
-------- -------- -------- --------
Net amount recognized........................... $ 10,509 $ 10,637 $(36,448) $(36,716)
======== ======== ======== ========
WEIGHTED-AVERAGE ASSUMPTIONS AS OF DECEMBER 31
Discount rate................................... 8.00% 7.00% 8.00% 7.00%
Expected return on plan assets.................. 10.00% 9.00% N/A N/A
Rate of compensation increase................... 5.00% 5.00% N/A N/A

For measurement purposes, a 7.00 percent annual rate of increase in the per
capita cost of covered health care benefits was assumed for 2000 decreasing
gradually to 6.00 percent in 2002 and remaining at that level thereafter for
pre-65 benefits and 6.00 percent for post-65 benefits for all years.

F-20
51
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BRUSH WELLMAN INC. AND SUBSIDIARIES -- (CONTINUED)

PENSION BENEFITS OTHER BENEFITS
----------------------------- --------------------------
1999 1998 1997 1999 1998 1997
------- ------- ------- ------ ------ ------
(DOLLARS IN THOUSANDS)

COMPONENTS OF NET PERIODIC BENEFIT
COST
Service cost...................... $ 3,649 $ 3,063 $ 2,434 $ 362 $ 345 $ 312
Interest cost..................... 5,842 5,154 4,916 2,114 2,122 2,174
Expected return on plan assets.... (9,288) (7,589) (7,082) -- -- --
Amortization of prior service
cost............................ 613 340 258 -- -- --
Amortization of initial net
(asset) obligation.............. (707) (707) (707) -- -- --
Recognized net actuarial (gain)
loss............................ -- 3 2 (159) (215) (230)
------- ------- ------- ------ ------ ------
Net periodic benefit cost......... $ 109 $ 264 $ (179) $2,317 $2,252 $2,256
======= ======= ======= ====== ====== ======

The Company revised the expected return on asset assumption used in
calculating the annual expense for its various domestic pension plans in
accordance with SFAS No. 87, "Employers' Accounting for Pensions". The assumed
expected rate of return was increased to 10.0% from 9.0% with the impact being
accounted for as a change in estimate. The Company believes that this change is
a more accurate representation of the expected performance of the plans' assets.
The change resulted in an increase to net income of $613,000 and an increase to
diluted earnings per share of $0.04 in 1999.

The projected benefit obligation, accumulated benefit obligation, and fair
value of plan assets for the pension plans with accumulated benefit obligations
in excess of plan assets were $1,463,000, $1,068,000, and $0, respectively, as
of December 31, 1999, and $1,275,000, $852,000, and $0, respectively, as of
December 31, 1998.

Assumed health care cost trend rates have a significant effect on the
amounts reported for the health care plans. A one-percentage-point change in
assumed health care cost trend rates would have the following effects:

1-PERCENTAGE 1-PERCENTAGE
POINT POINT
INCREASE DECREASE
------------ ------------
(DOLLARS IN THOUSANDS)

Effect on total of service and interest cost components..... $ 109 $ (101)
Effect on postretirement benefit obligation................. 1,482 (1,304)

The Company also has accrued unfunded retirement arrangements for certain
directors. At December 31, 1999, the projected benefit obligation was $213,000
($239,000 in 1998). A corresponding accumulated benefit obligation of $213,000
($239,000 in 1998) has been recognized as a liability in the balance sheet and
is included in retirement and post-employment benefits. Certain foreign
subsidiaries have funded and accrued unfunded retirement arrangements which are
not material to the consolidated financial statements.

The Company also sponsors a defined contribution plan available to
substantially all U. S. employees. Company contributions to the plan are based
on matching a percentage of employee savings up to a specified savings level.
The Company's contributions were $2,358,000 in 1999, $2,291,000 in 1998, and
$2,207,000 in 1997.

F-21
52
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BRUSH WELLMAN INC. AND SUBSIDIARIES -- (CONTINUED)

NOTE M -- CONTINGENCIES AND COMMITMENTS

CBD CLAIMS

Management believes the Company has substantial defenses in these cases and
intends to contest the suits vigorously. Employee cases, in which plaintiffs
have a high burden of proof, have historically involved relatively small losses
to the Company. Third party plaintiffs (typically employees of our customers)
face a lower burden of proof than do our employees, but these cases are
generally covered by insurance.

Although it is not possible to predict the outcome of the litigation
pending against the Company and its subsidiaries, the Company provides for costs
related to these matters when a loss is probable and the amount is reasonably
estimable. Litigation is subject to many uncertainties, and it is possible that
some of these actions could be decided unfavorably in amounts exceeding the
Company's reserves. An unfavorable outcome or settlement of a pending CBD case
or additional adverse media coverage could encourage the commencement of
additional similar litigation. The Company is unable to estimate its potential
exposure to unasserted claims.

While the Company is unable to predict the outcome of the current or future
CBD proceedings, based upon currently known facts and assuming collectibility of
insurance the Company does not believe that resolution of these proceedings will
have a material adverse effect on the financial condition or cash flow of the
Company. However, the Company's results of operations could be materially
affected by unfavorable results in one or more of these cases.

ENVIRONMENTAL PROCEEDINGS

The Company has an active program for environmental compliance which
includes the identification of environmental projects and estimating their
impact on the Company's financial performance and available resources.
Environmental expenditures that relate to current operations, such as wastewater
treatment and control of airborne emissions, are either expensed or capitalized
as appropriate. The Company records reserves for the probable costs for
environmental remediation projects. The Company's environmental engineers
perform routine on-going analyses of the remediation sites. Accruals are based
upon their analyses and are established at either the best estimate or at the
low end of the estimated range of costs. The accruals are revised for the
results of on-going studies and for differences between actual and projected
costs. The accruals are also affected by rulings and negotiations with
regulatory agencies. The timing of payments often lags the accrual as
environmental projects typically require a number of years to complete. The
Company established undiscounted reserves of $8,316,000 at December 31, 1999
($7,858,000 at December 31, 1998). The current portion of the reserve totaled
$610,000 at December 31, 1999 and is included in the Consolidated Balance Sheet
as Other liabilities and accrued items while the remaining $7,706,000 of the
reserve at December 31, 1999 is considered long-term and is included under Other
long-term liabilities. The Company expects that any sum it may be required to
pay in connection with environmental matters is not reasonably likely to exceed
the reserve by amounts that would be material to the financial statements.
However, the Company cannot predict the effect of compliance with environmental
requirements with respect to unknown environmental matters on the Company's
financial position or the possible effect of compliance with environmental
requirements imposed in the future.

Environmental expenses approximated $0.9 million, $3.2 million and $1.7
million in 1999, 1998 and 1997, respectively. As further described in Note I,
1998 expenses included $2.1 million for the VAP recorded as part

F-22
53
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BRUSH WELLMAN INC. AND SUBSIDIARIES -- (CONTINUED)

of the special charge. The majority of the accrual in all three years is
associated with RCRA projects, SWMU closures and other projects at the Company's
Elmore, Ohio facility. The Company also adopted SOP 96-01 during the periods
presented which led to an increase in environmental expenses of approximately
$0.3 million to cover direct project management costs not included in previous
cost estimates.

The Company has outstanding letters of credit totaling $1,370,000 related
to workers' compensation and environmental remediation issues. The letters
expire in 2000.

OTHER

The Company is subject to various other legal or other proceedings that
relate to the ordinary course of its business. The Company believes that the
resolution of these other legal or other proceedings, individually or in the
aggregate, will not have a material adverse impact upon the Company's
consolidated financial statements.

F-23
54
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BRUSH WELLMAN INC. AND SUBSIDIARIES -- (CONTINUED)

NOTE N -- SEGMENT REPORTING AND GEOGRAPHIC INFORMATION

Selected financial data by business segment as prescribed by SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related Information", for 1999,
1998, and 1997 are as follows:

METAL MICRO- TOTAL ALL
SYSTEMS ELECTRONICS SEGMENTS OTHER TOTAL
-------- ----------- -------- -------- --------
(DOLLARS IN THOUSANDS)

1999
Revenues from external
customers................. $306,118 $140,566 $446,684 $ 9,023 $455,707
Intersegment revenues....... 276 1,560 1,836 -- 1,836
Depreciation, depletion, and
amortization.............. 13,437 2,305 15,742 11,295 27,037
Profit (loss) before
interest and taxes........ 16,300 11,380 27,680 (17,122) 10,558
Assets...................... 280,868 61,298 342,166 82,325 424,491
Expenditures for long-lived
assets.................... 11,410 3,437 14,847 2,199 17,046

1998
Revenues from external
customers................. $295,705 $106,347 $402,052 $ 7,840 $409,892
Intersegment revenues....... 482 1,145 1,627 -- 1,627
Special Charge.............. -- -- -- 22,572 22,572
Depreciation, depletion, and
amortization.............. 15,716 2,283 17,999 6,590 24,589
Profit (loss) before
interest and taxes........ 27,897 2,120 30,017 (40,330) (10,313)
Assets...................... 262,847 51,052 313,899 89,791 403,690
Expenditures for long-lived
assets.................... 21,054 7,432 28,486 8,679 37,165

1997
Revenues from external
customers................. $302,403 $124,418 $426,821 $ 6,980 $433,801
Intersegment revenues....... 1,616 773 2,389 -- 2,389
Depreciation, depletion, and
amortization.............. 12,870 2,543 15,413 3,916 19,329
Profit (loss) before
interest and taxes........ 51,024 2,860 53,884 (17,860) 36,024
Assets...................... 253,462 48,000 301,462 82,390 383,852
Expenditures for long-lived
assets.................... 42,302 2,502 44,804 17,877 62,681

The loss before interest and taxes in All Other includes corporate and
certain unallocated costs, non-operating items of other income/expense, and the
revenues and related costs from one manufacturing facility. Segments are
evaluated using earnings before interest and taxes. In 1998, the Company
recorded a special charge of $22.6 million (see Note I to the Consolidated
Financial Statements). While this charge included write-downs of assets of the
Metal Systems and Microelectronics Groups, it was not recorded against their
profits as management evaluates the profitability of those groups exclusive of
the special charge. Assets shown in All Other include cash, computer hardware
and software, deferred taxes, capitalized interest, and the operating assets for
one manufacturing facility. Inventories for Metal Systems and Microelectronics
are shown

F-24
55
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BRUSH WELLMAN INC. AND SUBSIDIARIES -- (CONTINUED)

at their FIFO values with the LIFO reserve included under the All Other column.
Intersegment revenues are eliminated in consolidation. The revenues from
external customer totals are presented net of the intersegment revenues.

The Company's sales from U.S. operations to external customers, including
exports, were $368,494,000 in 1999, $327,927,000 in 1998, and $345,100,000 in
1997. Revenues attributed to countries based upon the location of customers and
long-lived assets deployed by the Company by country are as follows:

1999 1998 1997
-------- -------- --------
(DOLLARS IN THOUSANDS)

REVENUES
United States...................................... $318,188 $280,830 $291,378
All Other.......................................... 137,519 129,062 142,423
-------- -------- --------
Total.............................................. $455,707 $409,892 $433,801

LONG-LIVED ASSETS
United States...................................... $149,048 $158,186 $167,494
All Other.......................................... 6,641 6,283 6,128
-------- -------- --------
Total.............................................. $155,689 $164,469 $173,622

No individual country, other than the United States, or customer accounted
for 10% or more of the Company's revenues for the years presented. Revenues from
outside the U.S. are primarily from Europe and Asia.

NOTE O -- QUARTERLY DATA (UNAUDITED)

1999
--------------------------------------------------------
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER TOTAL
-------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)

Net sales........................... $113,168 $108,666 $113,794 $120,079 $455,707
Gross profit........................ 24,099 25,158 18,813 23,864 91,934
Percent of sales.................. 21.3% 23.2% 16.5% 19.9% 20.2%
Net income (loss)................... 2,486 3,234 (552) 1,271 6,439
Earnings (loss) per share of common
stock:
Basic............................. 0.15 0.20 (0.03) 0.08 0.40
Diluted........................... 0.15 0.20 (0.03) 0.08 0.40
Dividends per share of common
stock............................. 0.12 0.12 0.12 0.12 0.48
Stock price range
High.............................. 18.19 18.69 18.25 16.81
Low............................... 13.94 13.44 14.69 13.13

F-25
56
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BRUSH WELLMAN INC. AND SUBSIDIARIES -- (CONTINUED)

1998
------------------------------------------------------
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER TOTAL
-------- -------- ------- ------- --------
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)

Net sales............................. $114,181 $102,992 $96,240 $96,479 $409,892
Gross profit.......................... 28,029 17,516 19,416 19.758 84,719
Percent of sales.................... 24.5% 17.0% 20.2% 20.5% 20.7%
Net income (loss)..................... 6,162 (13,084) 98 (308) (7,132)
Earnings (loss) per share of common
stock:
Basic............................... 0.38 (0.80) 0.01 (0.02) (0.44)
Diluted............................. 0.37 (0.80) 0.01 (0.02) (0.44)
Dividends per share of common stock... 0.12 0.12 0.12 0.12 0.48
Stock price range
High................................ 28.50 29.69 22.75 17.44
Low................................. 22.94 19.13 13.81 11.94

Included in the second quarter 1998 is $15.9 million of the $16.5 million
after tax special charge.

F-26
57

SELECTED FINANCIAL DATA

BRUSH WELLMAN INC. AND SUBSIDIARIES
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- ----------

FOR THE YEAR
Net sales.................................... $ 455,707 $ 409,892 $ 433,801 $ 376,279 $ 369,618
Cost of sales................................ 363,773 325,173 324,463 271,149 268,732
Gross profit................................. 91,934 84,719 109,338 105,130 100,886
Operating profit (loss)...................... 10,558 (10,313) 36,024 34,305 29,086
Interest expense............................. 4,173 1,249 553 1,128 1,653
Income (loss) before income taxes............ 6,385 (11,562) 35,471 33,177 27,433
Income taxes (benefit)....................... (54) (4,430) 9,874 8,686 6,744
Net income (loss)............................ 6,439 (7,132) 25,597 24,491 20,689
Earnings per share of common stock:
Basic net income (loss).................... 0.40 (0.44) 1.58 1.55 1.28
Diluted net income (loss).................. 0.40 (0.44) 1.56 1.53 1.27
Dividends per share of common stock.......... 0.48 0.48 0.46 0.42 0.36
Depreciation and amortization................ 27,037 24,589 19,329 22,954 20,911
Capital expenditures......................... 16,758 36,732 53,155 26,825 24,244
Mine development expenditures................ 288 433 9,526 3,663 787
YEAR-END POSITION
Working capital.............................. $ 124,831 $ 100,992 $ 100,599 $ 128,172 $ 125,156
Ratio of current assets to current
liabilities................................ 2.3 TO 1 2.1 to 1 2.3 to 1 2.9 to 1 2.9 to 1
Property and equipment:
At cost.................................... $ 421,293 $ 421,467 $ 463,689 $ 404,127 $ 374,367
Cost less depreciation and impairment...... 155,689 164,469 173,622 130,220 121,194
Total assets................................. 424,491 403,690 383,852 355,779 331,853
Other long-term liabilities.................. 49,922 49,955 48,025 47,271 45,445
Long-term debt............................... 42,305 32,105 17,905 18,860 16,996
Shareholders' equity......................... 220,638 221,811 236,813 219,257 200,302
Book value per share:
Basic...................................... $ 13.62 $ 13.63 $ 14.60 $ 13.84 $ 12.40
Diluted.................................... 13.55 13.50 14.41 13.72 12.30
Average number of shares of stock
outstanding:
Basic...................................... 16,198,885 16,267,804 16,214,718 15,846,358 16,159,508
Diluted.................................... 16,279,591 16,267,804 16,429,468 15,980,481 16,289,795
Shareholders of record....................... 2,330 2,313 2,329 2,407 2,351
Number of employees.......................... 2,257 2,187 2,160 1,926 1,856

A special charge reduced net income by $16.5 million in 1998.

F-27