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 [FEE REQUIRED]

For the fiscal year ended December 31, 1997

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

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 9, 1998 was approximately $434,116,719.

As of March 9, 1998, there were 16,523,822 shares of Common Stock, par
value $1 per share, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the annual report to shareholders for the year ended December
31, 1997 are incorporated by reference into Parts I and II.

Portions of the proxy statement for the annual meeting of shareholders to
be held on May 5, 1998 are incorporated by reference into Part III.

PART I

ITEM 1. BUSINESS
- ------- --------

Brush Wellman Inc. ("Company") manufactures and sells engineered
materials for use by manufacturers and others who perform further operations for
eventual incorporation into capital, aerospace/defense or consumer products.
These materials typically comprise a small portion of the final product's cost.
They are generally premium priced and are often developed or customized for the
customer's specific process or product requirements. The Company's product lines
are supported by research and development activities, modern processing
facilities and a global distribution network.

Customers include manufacturers of electrical/electronic
connectors, communication equipment, computers, automobiles, lasers,
appliances, spacecraft, aircraft, oil field instruments and equipment, sporting
goods, and defense contractors and suppliers to all of the foregoing industries.

The Company operates in a single business segment with product
lines comprised of beryllium-containing materials and other specialty materials.

The Company is a fully integrated producer of beryllium,
beryllium alloys (primarily copper beryllium), and beryllia ceramic, each of
which exhibits its own unique set of properties. The Company holds extensive
mineral rights and mines the beryllium bearing ore, bertrandite, in central
Utah. Beryllium is extracted from both bertrandite and imported beryl ore. In
1997, 66% of the Company's sales were of products containing the element
beryllium (73% in 1996 and 73% in 1995). Beryllium-containing products are sold
in competitive markets throughout the world through a direct sales organization
and through 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. General Ceramics Inc. is a
domestic competitor in beryllia ceramic. Other competitive materials include
alumina, aluminum nitride and composites. 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.

Sales of other specialty materials, principally metal systems
and precious metal products, were 34% of total sales in 1997 (27% in 1996 and
27% in 1995). Precious metal products are produced by Williams Advanced
Materials Inc. (hereinafter referred to as WAM), a subsidiary of the Company
comprised of businesses acquired in 1986, 1989 and 1994. 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 in the vapor deposition markets are
Materials Research Corp., Tosoh and Engelhard corporations. The
semiconductor/hybrid market segment competition includes Johnson Matthey, SPM
and Semi-Alloys. The products are sold directly from WAM's facilities in
Buffalo, New York and Singapore as well as through sales representatives
throughout the world.

1
3

Technical Materials, Inc. (hereinafter referred to as "TMI"), a
subsidiary of the Company, produces specialty metal systems, consisting
principally of narrow metal strip, such as copper alloys, nickel alloys and
stainless steels into which strips of precious and non-precious metal are
inlaid. TMI also offers a number of other narrow metal strip material systems,
including electron beam welded dual metal, contour milling and skiving, thick
and thin selective solder coatings, selective electroplated products and bonded
aluminum strips on nickel-iron alloys for semiconductor leadframes. Divisions of
Cookson, Metallon and some European manufacturers are competitors for the sale
of inlaid strip. Strip with selective electroplating is a competitive
alternative as are other design approaches. The products are sold directly and
through sales representatives.

Circuits Processing Technology, Inc. (hereinafter referred to as
"CPT"), a subsidiary of the Company produces high reliability thick film
circuits and other types of complex circuits supporting all aspects of hybrid
circuit requirements for both Defense and the commercial marketplace. CPT's
principal competitor in high reliability circuit fabrication is M.I.C., in the
commercial marketplace it's main competitor is Amitron.

Sales and Backlog
-----------------

The backlog of unshipped orders as of December 31, 1997, 1996 and
1995 was $ 93,954,000, $94,428,000 and $95,718,000 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 at December 31, 1997 will be filled during 1998.

Sales are made to approximately 5,300 customers. Government
sales, principally subcontracts, accounted for about 1.1% of consolidated sales
in 1997 as compared to 1.2% in 1996 and 1.3% in 1995. Sales outside the United
States, principally to Western Europe, Canada and Japan, accounted for
approximately 31% of sales in 1997, 29% of sales in 1996 and 34% in 1995.
Financial information as to sales, identifiable assets and profitability by
geographic area set forth on page 19 Note N to the consolidated financial
statements in the annual report to shareholders for the year ended December 31,
1997 is incorporated herein by reference.

Research & Development
----------------------

Active research and development programs seek new product
compositions and designs as well as process innovations. Expenditures for
research and development amounted to $7,709,000 in 1997, $8,309,000 in 1996 and
$7,814,000 in 1995. A staff of 57 scientists, engineers and technicians was
employed in this effort during 1997. Some research and development projects were
externally sponsored and expenditures related to those projects (approximately
$170,000 in 1997, $166,000 in 1996 and $36,000 in 1995) are excluded from the
above totals.

2
4

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 to support current production levels 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.

Environmental Matters
---------------------

Employees
---------

As of December 31, 1997 the Company had 2,160 employees.

Forward-looking Information
---------------------------

The portions of narrative set forth in this Item 1 and
elsewhere in this Annual Report on Form 10-K that are not historical in nature
are forward-looking statements. The Company's actual future performance may
differ from that contemplated by the forward-looking statements as a result of a
variety of factors that include, in addition to those mentioned elsewhere
herein, the condition of the markets which the Company serves, the success of
the Company's strategic plans, the timely and successful completion of pending
capital expansions and the conclusion of pending litigation matters in
accordance with the Company's expectation that there will be no materially
adverse effects.

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5

ITEM 2. PROPERTIES
- ------- ----------

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

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.

ELMORE, OHIO - A complex containing approximately 676,000 square
feet of building space on a 385 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.

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.

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

TUCSON, ARIZONA - A 45,000 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.

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.

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 set forth on page 23 of this Form 10-K annual report for the
year ended December 31, 1996 is incorporated herein by reference.

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

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

STUTTGART, WEST GERMANY - A 24,750 square foot leased facility
principally for distribution of beryllium alloys.

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6

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

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.

LINCOLN, RHODE ISLAND - A manufacturing facility consisting of
124,000 square feet located on seven and one-half acres. This facility produces
metal strip inlaid with precious metals and related metal systems products.

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.

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.

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

Production capacity is believed to be adequate to fill the
Company's backlog of orders and to meet the current level of demand. However,
the Company is currently re-evaluating production capacity in light of
anticipated sales increases from development of new applications for the
Company's products and expanding international presence. In May 1996, the Board
of Directors approved a plan for a major expansion and upgrading of alloy strip
capabilities involving the investment of $117 million at the Company's Elmore ,
Ohio facility. The plant is currently under construction and is targeted to
begin production in the fourth quarter of 1998. The goal of this investment is
to increase strip production capacity, reduce production costs, improve quality,
reduce delivery lead times, and optimize working capital utilization.

ITEM 3. LEGAL PROCEEDINGS
- ---------------------------

(a) Environmental Proceedings.
--------------------------

PENDING CLAIMS. The Company received a complaint on July 26, 1994 in
GLIDDEN COMPANY ET AL. V. AMERICAN COLOR AND CHEMICAL ET AL., No. 94-C-3970,
filed in the United States District Court for the Eastern District of
Pennsylvania. The plaintiffs are five companies that, pursuant to orders issued
by the U.S. Environmental Protection Agency (the "U.S. EPA") under the
Comprehensive, Environmental, Response, Compensation and Liability Act
("CERCLA"), have been spending funds to secure, maintain and conduct an
investigation of the Berks Landfill in Sinking Springs, Pennsylvania (the "Berks
Site"). The plaintiffs are alleged to have disposed of wastes at the Berks Site,
which operated from 1950 through October 1, 1986. The 40 defendants (22 of which
were added in 1997) consist of former owners or operators of the Berks Site and
alleged transporters and/or generators of waste disposed of at the Berks Site.
It is believed that hundreds of other entities disposed of waste at the Berks
Site during its long period of operation. The plaintiffs seek to recover their
past and future costs pursuant to rights of contribution under CERCLA and the
Pennsylvania Hazardous Sites Cleanup Act. Plaintiffs allege that they have spent
approximately $3 million to secure and maintain the Berks Site and to prepare a
remedial investigation/feasibility study and a risk assessment. Discovery is
proceeding pursuant to a case management order. On September 30, 1997, the U.S.
EPA sent a special notice letter to the Company and 28 other entities, 7 of whom
are not parties to the GLIDDEN litigation. The letter requested reimbursement of
the U.S. EPA's past costs (at least $755,959) and future costs relating to the
landfill, and solicited a proposal to conduct or finance the remedial action
selected by the U.S. EPA in its July 1997 Record of Decision, the present worth
cost of which is estimated by the U.S. EPA to be $6.1 million. The U.S. EPA
received no proposal in response to its letter. The Company has requested that
the U.S. EPA consider it to be a candidate for a DE MINIMIS settlement. The
Company's expenses at the Berks Site will be affected by a number of
uncertainties, including the method and extent of remediation, the percentage of
waste disposed of at the Berks Site attributable to the Company relative to that
attributable to other parties, and the financial capabilities of the other
Potentially Responsible Persons (the "PRPs").

5
7

On or about September 25, 1992, the Company was served with a
third-party complaint alleging that the Company, along with 159 other
third-party defendants, is jointly and severally liable under CERCLA, 42 U.S.C.
Sections 9607(a) and 9613(b), for response costs incurred in connection with the
clean-up of hazardous substances in soil and groundwater at the Douglassville
Site (the "Douglassville Site") located in Berks County, Pennsylvania: UNITED
STATES OF AMERICA V. BERKS ASSOCIATES INC. ET AL. V. AAMCO TRANSMISSIONS ET AL.,
Case No. 91-4868, United States District Court for the Eastern District of
Pennsylvania. Third-party complaints adding further parties have been
subsequently filed. Prior to the commencement of litigation, the Company had
responded to a request for information from the U.S. EPA by denying that it
arranged to send any substances to the Douglassville Site. Although the Company
has no documents in its own files relating to the shipment of any waste to the
Douglassville Site, documents maintained by third-party plaintiffs suggest that
8,344 gallons of waste oil from the Company may have been taken there. According
to a consultant retained by third-party plaintiffs, approximately 153 million
gallons of waste were sent to the Douglassville Site. The Company denies
liability. The Company participated in court-ordered settlement proceedings,
which resulted in a DE MINIMIS settlement offer by the United States. The
Company has accepted that offer and is awaiting notice from the government
showing the final settlement calculation.

The Company was identified as one of the PRPs under CERCLA at the
Spectron Superfund Site in Elkton, Maryland (the "Elkton Site"). The Company
reached a settlement with 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.

The Company has advised the U.S. EPA and the Ohio Environmental
Protection Agency that it was unable to meet the December 1997 deadline for
achieving emission limitations for a solvent degreaser at its Elmore, Ohio
plant. For purposes of considering the issuance of a compliance order, the U.S.
EPA has requested information concerning the circumstances leading to the
Company's inability to comply and its timetable for achieving compliance. The
U.S. EPA has expressed no current intention of imposing a penalty.

(b) BERYLLIUM EXPOSURE CLAIMS.

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 developed by the Atomic Energy
Commission over forty years ago, were, in general, substantially adopted by 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. For example, the Department of Energy has
concluded that, in its opinion, current beryllium standards may not be adequate
to protect its own workers, and has gathered data, views and other relevant
information to develop a possible revised standard for occupational exposure to
beryllium at Department of Energy facilities. Some of the private litigants
mentioned below have made similar claims. In contrast, the American Conference
of Governmental Industrial Hygienists, a professional organization devoted to
the administrative and technical aspects of occupational and environmental
health, recently has retained the current occupational exposure standards and
has added a new occupational exposure standard to limit short-term exposures.

PENDING CLAIMS. The Company is currently a defendant in the following
eight product liability cases in which the plaintiffs allege injury resulting
from exposure to beryllium and beryllium-containing materials, other than as
employees of the Company, and are claiming recovery based on various legal
theories. These cases were previously reported in the Company's annual report on
Form 10-K for the year ended December 31, 1996 or in the Company's quarterly
report on Form 10-Q for the quarters ended June 27, 1997 and September 26, 1997,
respectively. The Company believes that resolution of these cases will not have
a material adverse effect on the Company. Defense for each of the cases
identified in the table below is being conducted by counsel selected by the
Company and retained, with reservations of rights, by the Company's insurance
carriers.

====================================================================================================================================
DATE LAWSUIT
------------
NAME OF PLAINTIFF INSTITUTED FORUM RELIEF REQUESTED
- ----------------- ---------- ----- ----------------
- ------------------------------------------------------------------------------------------------------------------------------------

Richard Neiman and November 1990 Court of Common Pleas, The Company is one of three defendants. Plaintiffs
Spouse Montgomery County, seek damages in excess of $20,000 for personal injury
Pennsylvania and in excess of $20,000 for loss of consortium.
- ------------------------------------------------------------------------------------------------------------------------------------
Harry Robbins and June 1993 Court of Common Pleas, The Company is one of three defendants. Both
Spouse Montgomery County, plaintiffs individually seek compensatory damages in
Pennsylvania excess of $50,000. Mr. Robbins also seeks punitive
damages in excess of $50,000.
- ------------------------------------------------------------------------------------------------------------------------------------
Troy Murphy Morgan, June 1994 United States District Court, The Company is one of several defendants, together
Corky Dean McCarter and Eastern District of Tennessee with the United States. In the Fourth Amended
wife, Karen Denise Smith Complaint (served in April 1997), plaintiffs' aggregate
McCarter, Richard Emory claims against the corporate defendants, including
Myers, Sr. and wife, compensatory and punitive damages, are $44 million.
Wilma Dean Kennedy
Myers, and Kathlene
Beatty
- ------------------------------------------------------------------------------------------------------------------------------------
George F. Faccio and July 1995 United States District Court, The Company is the only defendant. Plaintiffs seek
Spouse District of Arizona compensatory and punitive damages of an unspecified
amount.
- ------------------------------------------------------------------------------------------------------------------------------------
Ballinger et al. November 1996 United States District Court, The Company is the only defendant. Plaintiffs seek
Colorado compensatory and punitive damages of an unspecified
amount.
- ------------------------------------------------------------------------------------------------------------------------------------
Foster et al. February 1997 United States District Court, The Company is one of several defendants. Gary
Eastern District of Tennessee Foster seeks compensatory damages from each
corporate defendant of $5 million. His spouse
seeks compensatory damages from each defendant of
$1 million. Both plaintiffs seek punitive damages
from each defendant of $10 million.
- ------------------------------------------------------------------------------------------------------------------------------------
Wallace et al. June 1997 Filed in the Superior Court The Company is one of several defendants. The
of California, County of Los plaintiffs seek damages in an unspecified amount.
Angeles; transferred to
Orange County, California
- ------------------------------------------------------------------------------------------------------------------------------------
Grant et al. August 1997 United States District Court, The Company is one of several defendants. Mr. Grant
Eastern District of Tennessee seeks compensatory damages of $5 million against
each defendant. His spouse seeks compensatory
damages of $1 million against each defendant, and
both seek punitive damages of $10 million against each
defendant.
====================================================================================================================================

Discovery is continuing in five of the eight cases reported above:
NEIMAN ET AL. V. CABOT CORP. ET AL.; ROBBINS ET AL. V. CABOT CORP. ET AL.;
MORGAN ET AL. V. BRUSH WELLMAN INC. ET AL.; FOSTER ET AL. V. BRUSH WELLMAN INC.
ET AL.; and GRANT ET AL. V. BRUSH WELLMAN INC. ET AL. (USDC, Tennessee). In
FACCIO ET AL. V. BRUSH WELLMAN INC. also, discovery is ongoing, and several
procedural motions, some of which sought sanctions against the Company, were
filed. The motions seeking sanctions alleged that the Company, without
substantial justification, failed to produce documentation within its possession
and control in response to discovery requests.

The Court has ruled on two of the plaintiffs' procedural motions, denying
sanctions (it also denied the Company's request for sanctions against the
plaintiffs). Several additional procedural motions were heard in January 1998,
but the Court has not yet issued its order. The plaintiffs filed another motion
in January 1998 seeking sanctions. To date, no trial date has been established.

BALLINGER ET AL. V. BRUSH WELLMAN INC. ET AL. was filed against the
Company and one other defendant by 26 plaintiffs who allegedly have chronic
beryllium disease ("CBD"), and their spouses, and one representative of a spouse
who allegedly died from CBD (for a total of 43 plaintiffs). The defendants filed
various motions in response to the complaint, including a motion to dismiss.
Before a ruling on the motion to dismiss, an amended complaint was filed in
September 1997 adding 7 plaintiffs who allegedly have CBD and their spouses (for
a total of 14 additional plaintiffs). Various motions were again filed,
including a motion to dismiss. Before a ruling was made on the motion to dismiss
the amended complaint, a second amended complaint was filed in December 1997.
One plaintiff and his spouse moved for dismissal of their claims without
prejudice, which motion was granted. Also, in December 1997, the remaining
plaintiffs agreed to dismiss the second defendant and filed an agreed motion for
dismissal. The Court granted this second agreed motion on February 13, 1998. In
response to the second amended complaint, on January 23, 1998, the Company moved
to dismiss 47 of the 55 plaintiffs and answered as to the remaining 8
plaintiffs. The Court has not ruled on this motion.

The complaint in WALLACE ET AL. V. BRUSH WELLMAN INC. ET AL. was
answered by the Company on August 15, 1997. The case has since been transferred
to Orange County and is in its very early stages of discovery.

In LINDSTEDT V. NATIONAL BERYLLIUM CORP. ET AL., SPECTRA-PHYSICS, INC.
V. BRUSH WELLMAN INC., a suit brought by an employee of the Company against a
number of defendants, including Spectra Physics, a customer of the Company, for
personal injury resulting from exposure to beryllium containing materials, the
customer filed a third-party complaint against the Company on December 12, 1996
in the Superior Court of New Jersey, seeking indemnification. The third-party
complaint was dismissed by the Court in early 1997. Spectra-Physics has since
settled with the plaintiff and has itself been dismissed from the action. On
March 20, 1998, the single remaining defendant requested, and was granted,
permission to identify the Company as a party for discovery purposes only.
Accordingly, the Company remains a party solely for this purpose. The Company
believes that resolution of this case will not have a material adverse effect on
the Company.

Nine Company employees and their spouses had filed law suits against
the Company and certain of its employees in the Superior Court of Pima County,
Arizona: COLE ET AL. V. BRUSH WELLMAN INC. ET AL.; CRUZ ET AL. V. BRUSH WELLMAN
INC. ET AL.; HAYNES-KERN ET AL. V. BRUSH WELLMAN INC. ET AL.; MATULIN ET AL. V.
BRUSH WELLMAN INC. ET AL.; FIMBRES ET AL. V. BRUSH WELLMAN INC. ET AL.; FLORES
ET AL. V. BRUSH WELLMAN INC. ET AL.; KOFIRA ET AL. V. BRUSH WELLMAN INC. ET AL.;
MALDONADO ET AL. V. BRUSH WELLMAN INC. ET AL.; and STOECKER ET AL. V. BRUSH
WELLMAN INC. ET AL. Six of these suits were instituted on June 29, 1994; one was
instituted on December 13, 1994; and two were instituted on February 28, 1995.
The plaintiffs claimed that, during their employment with the Company, they
contracted CBD as a result of exposure to beryllium and beryllium-containing
products. The plaintiffs sought compensatory and punitive damages of an
unspecified amount based on allegations that the Company intentionally
misrepresented the potential danger of exposure to beryllium and breached an
agreement to pay certain benefits should the plaintiffs contract CBD. On July 5,
1996, Rudy Gamez, an employee of the Company, filed a suit in the Superior Court
of Pima County, Arizona (GAMEZ ET AL. V. BRUSH WELLMAN INC. ET AL.), based upon
similar claims and seeking similar relief. The first nine cases noted above were
dismissed by the trial court and currently are on appeal following a summary
judgment entered in favor of the Company on August 26, 1996. However, the
Company's motion for summary judgment did not cover the GAMEZ case, which was
filed after the Company had filed its summary judgment motion. Discovery is
currently ongoing in this action. Defense of all of these cases is being
conducted by counsel retained by the Company, and the Company believes that
resolution of these cases will not have a material adverse effect on the
Company.

In August 1994 and April 1995, the Company notified the State
Compensation Fund, a workers' compensation fund in the State of Arizona, of the
filing of certain of the above-mentioned employee suits and requested that the
State Compensation Fund defend such suits pursuant to the Company's State
Compensation Fund policies. The State Compensation Fund denied coverage and
defense of such suits, but, after discussion, indicated that it would defend
some of the employee lawsuits under a reservation of rights. Pursuant to that
commitment, the State Compensation Fund has reimbursed the Company for a
substantial portion of the costs incurred by the Company in defending the first
nine employee lawsuits noted above at the trial court level.

In view of the dispute with respect to coverage, however, the State
Compensation Fund filed a declaratory judgment action against the Company and
certain of its employees in the Superior Court of Pima County, Arizona, for
which service of process occurred on August 21, 1995: STATE COMPENSATION FUND V.
BRUSH WELLMAN INC. ET AL. The Company filed an answer and counterclaim to the
effect that, among other things, the State Compensation Fund had a duty to
defend and indemnify the Company. The Company sought an award of not only the
costs of defending the underlying actions, but also the costs incurred with
respect to the coverage, litigation and punitive damages. On May 13, 1996, the
Court entered an order granting the State Compensation Fund's motions for
partial summary judgment, which, among other things, sought a declaration of no
duty to defend or indemnify the Company against claims for breach of contract
and claims for intentional tort. These rulings did not completely dispose of the
State Compensation Fund's claims and did not address the Company's counterclaim.
As of September 1, 1996, the State Compensation Fund refused to reimburse the
Company for any further defense costs that the Company might incur. The State
Compensation Fund has also indicated that it plans to seek reimbursement of
defense costs already paid. Further proceedings in this action have been stayed
pending a ruling on the employees' appeals from the dismissal of their lawsuits
by the Superior Court of Pima County, Arizona, in the underlying cases noted
above.

9
11

In September 1995 and January 1996, the Company notified the Argonaut
Insurance Company that it was requesting the defense of two of the
aforementioned employee lawsuits. Argonaut denied coverage, and, in April 1996,
it filed a declaratory judgment action against the Company and certain of its
employees in the Superior Court of Pima County, Arizona: ARGONAUT INSURANCE
COMPANIES V. BRUSH WELLMAN INC. ET AL. Subsequently, in September 1996, Argonaut
and the Company agreed that Argonaut would dismiss its declaratory judgment
action (with the right to refile it later), that they would not litigate any
coverage issues between themselves until the State Compensation Fund's
declaratory judgment action has been completely resolved and that both parties
would be bound by the resolution of the coverage issues in the State
Compensation Fund's declaratory judgment action.

The Company is a defendant in seven cases pending before the Court of
Common Pleas of Cuyahoga County, Ohio, brought by current and former employees
of the Company and, in most of the cases, their family members: BERLIN V. BRUSH
WELLMAN INC., filed January 24, 1997; KNEPPER ET AL. V. BRUSH WELLMAN INC.,
filed January 23, 1997; MIA JOHNSON, EXECUTRIX OF THE ESTATE OF ETHEL JONES ET
AL. V. BRUSH WELLMAN INC., filed January 22, 1997; JACOBS ET AL. V. BRUSH
WELLMAN INC., filed December 31, 1996; STARIN V. BRUSH WELLMAN INC., filed
December 31, 1996; MUSSER ET AL. V. BRUSH WELLMAN INC., filed October 25, 1996;
and WHITAKER ET AL. V. BRUSH WELLMAN INC., filed August 23, 1996. The complaints
in all of these cases allege that the employees contracted CBD at the workplace,
seek recovery on an intentional tort theory and, except in the BERLIN and STARIN
cases, include claims by family members. The plaintiffs in these cases seek both
compensatory and, except in the KNEPPER case, punitive damages. All of these
cases, except the KNEPPEr case, have been consolidated at least for purposes of
discovery and pretrial motions, and all are set for trial in June 1998. The
consolidation order of the Court indicates that, after discovery, the Court will
revisit whether the cases should be consolidated for trial. On October 6, 1997,
the Company filed a motion to dismiss or in the alternative for summary judgment
in the KNEPPER case. This motion remains pending. On October 16, 1997, one of
the employee-plaintiffs in the consolidated cases and his spouse dismissed their
complaint without prejudice. On November 26, 1997, the Company filed a motion
for summary judgment in the STARIN case. This motion remains pending. On March
20, 1998, the parties filed an agreed motion to stay discovery in all of the
seven cases on the grounds that the parties had negotiated a settlement and
would need time to reduce that settlement to definitive written agreements. In
addition, certain of the claims will be submitted for approval of the probate
division of the appropriate common pleas court. The motion to stay remains
pending and the parties are drafting written agreements. No assurance can be
given that the settlement will be effected as currently anticipated since the
agreements have not been signed, or, where necessary, submitted to the
appropriate probate court. The Company believes that resolution of these cases
will not have a material adverse effect on the Company.

An action was filed by the Arizona State Compensation Fund against the
Company in Pima County Superior Court, Arizona, seeking a declaratory judgment
that the Fund is not required to defend or indemnify the Company against claims
made in the WHITAKER case: STATE COMPENSATION FUND V. BRUSH WELLMAN INC., filed
December 11, 1996. The parties have agreed to stay further proceedings in the
case for a mutually agreed period of time.

CLAIMS INITIATED SINCE THE END OF THIRD QUARTER 1997. On December 19,
1997, the Company was named a defendant in a product liability case filed in the
Court of Common Pleas, Philadelphia County, Pennsylvania: FRANK CORVINO ET AL.
V. CABOT CORP. ET AL. In the complaint, Mr. Corvino alleges that he suffered
injury (including CBD) resulting from exposure to beryllium dust and fibers
emitted from a plant operated by defendants Cabot Corporation and NGK in the
vicinity of his place of work. Mr. Corvino also alleges that he suffered injury
as a result of exposure to beryllium supplied to his employers. The complaint
includes claims for negligence, product liability and loss of consortium. No
specific claim has been asserted against the Company. The plaintiffs seek
compensatory damages in excess of $50,000, and medical monitoring and punitive
damages of an unspecified amount. The defense of this case is being conducted by
counsel selected by the Company and retained, with reservations of rights, by
the Company's insurance carriers. The Company believes that resolution of this
case will not have a material adverse effect on the Company.

CLAIMS CONCLUDED SINCE THE END OF THIRD QUARTER 1997. On October 2,
1997, an employee of the Company and his spouse filed an action in the Court of
Common Pleas of Cuyahoga County, Ohio: DAVID NORGARD ET AL. V. BRUSH WELLMAN
INC. The complaint alleged that David Norgard contracted CBD during his
employment with the Company as a result of exposure to beryllium and beryllium
containing products, and included claims for employer intentional tort and loss
of consortium. The plaintiffs sought compensatory and punitive damages, each in
an amount in excess of $25,000. The case was consolidated, at least for purposes
of discovery and pretrial motions, with the six other cases pending against the
Company before the Court of Common Pleas for Cuyahoga County, Ohio, and
identified above. On November 5, 1997, the Company filed a motion to dismiss the
complaint based on the statute of limitations. On March 19, 1998, the plaintiffs
in this case dismissed their complaint without prejudice.

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In a product liability case brought by an employee of a customer of
Williams Advanced Materials, Inc., a subsidiary of the Company, in the Court of
Common Pleas, Chester County, Pennsylvania, the plaintiffs alleged personal
injury resulting from exposure to beryllium and beryllium containing materials
and loss of consortium, and claimed compensatory damages in excess of $25,000
based on various legal theories: DAVID TAGGART ET AL. V. ACECODENT, ET AL.,
filed on October 2, 1992. The plaintiffs dismissed this action against the
Company's subsidiary, but the case remained pending due to a cross-claim against
the Company's subsidiary by one of the other defendants. This cross-claim
against the Company's subsidiary was discontinued and a stipulation for
dismissal was filed with the Court. On March 3, 1998, the Court dismissed the
Company's subsidiary from the action.

The Company was one of five defendants in a product liability case
filed in the District Court of Harris County, Texas, on August 15, 1997: BILLY
RAY CASH ET AL. V. BRUSH WELLMAN INC. ET AL. The complaint alleged that the
Company sold harmful and toxic substances to Mr. Cash's employer and that, as a
result of exposure to such substances, Mr. Cash developed severe respiratory
disease. The complaint included claims for loss of consortium. The plaintiff's
sought compensatory and punitive damages of unspecified amounts. The plaintiffs
moved for voluntary dismissal of their action against the Company, and the
motion was granted by the Court on December 11, 1997.

A subsidiary of the Company (the "Subsidiary") is a co-defendant in
nineteen cases making claims for asbestos-induced illness allegedly relating to
the former operations of the Subsidiary, then known as The S.K. Wellman Corp.
Eighteen of these cases have been reported in prior filings with the S.E.C. In
all but a small portion of these cases, the Subsidiary is one of a large number
of defendants in each case. The plaintiffs seek compensatory and punitive
damages, in most cases of unspecified sums. Each case has been referred for
defense pursuant to liability insurance coverage and has been accepted for
defense without admission or denial of carrier liability. Two hundred
forty-seven similar cases previously reported have been dismissed or disposed of
by pretrial judgment, one by jury verdict of no liability and fourteen others by
settlement for nominal sums. The Company believes that resolution of the pending
cases referred to in this paragraph will not have a material adverse effect on
the Company.

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14

The Subsidiary 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 expenses of defense, and the Subsidiary, Pneumo Abex
Corporation and the insurers share payment of settlements and/or judgments. In
certain of the pending cases, both expenses of defense and payment of
settlements and/or judgments are subject to a limited, separate reimbursement
agreement with MLX Corp., the parent of the company that purchased the
Subsidiary's operating assets in 1986.

(d) OTHER MISCELLANEOUS PENDING CLAIMS.

A subsidiary of the Company, Technical Materials, Inc. ("TMI"), and an
employee of TMI are defendants in a case filed in the Superior Court of the
State of Rhode Island on October 15, 1997: HANDY & HARMAN ELECTRONIC MATERIALS
CORPORATION V. TECHNICAL MATERIALS, INC. ET AL. The complaint alleges that TMI
tortiously induced the employee to breach his confidentiality obligations to his
former employer, the plaintiff, and misappropriated trade secrets of the
plaintiff. The plaintiff seeks preliminarily and permanently to enjoin TMI from
using any confidential information obtained by the employee while he was
employed with the plaintiff, and compensatory and punitive damages of
unspecified amounts.

The Company is a defendant in a personal injury case filed in the
Court of Common Pleas for Ottawa County, Ohio, on January 24, 1997, by an
employee of the Company and his spouse: MATHIAS ET AL. V. BRUSH WELLMAN INC. The
plaintiffs seek compensatory damages in excess of $25,000 and punitive damages
in excess of $25,000 for an alleged acid spill.

The defense of these two cases is being conducted by counsel retained
by the Company. The Company believes that the resolution of these cases will not
have a material adverse effect on the Company.

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

Not Applicable.

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 55 Chairman of the Board, President, Chief Executive Officer
and Director

Michael D. Anderson 46 Vice President Beryllium Products

Carl Cramer 49 Vice President Finance, Chief Financial Officer

Brian J. Derry 52 Vice President Operations

Stephen Freeman 51 Vice President Alloy Products

Jordan P. Frazier 40 General Manager of Ceramic Products

Craig B. Harlan 60 Vice President International - Europe

Alfonso T. Lubrano 48 President - Technical Materials, Inc.

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16

John J. Paschall 60 President - Williams Advanced Materials Inc.

Andrew J. Sandor 58 Vice President Alloy Technology

Daniel A. Skoch 48 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 22, 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 5, 1996. He had served as Director Sales and Marketing-Beryllium
Products since November, 1994, Director of Marketing-Ceramics since February,
1994 and Director of Marketing since April, 1989.

MR. CRAMER was elected Vice President - Finance and Chief
Financial Officer in December 1994. Prior to that, he served as President of
U.S. Operations and Director for the Americas and Australasia for the Swedish
multinational, Esselte Meto.

MR. DERRY was elected Vice President Operations May 6, 1997.
Prior to that, he served as Director of Global Manufacturing for Ethyl
Corporation.

MR. FRAZIER was appointed General Manager of Ceramic Products on
December 2, 1997. He had served as General Manager of Ceramic Operations since
September 7, 1996. He had served as Director of Sales and Marketing for Ceramic
Products since February 1, 1996.

MR. FREEMAN was elected Vice President Alloy Products effective
February 7, 1995. He had served as Vice President Sales and Marketing since
August 3, 1993. He had served as Vice President Sales and Marketing-Alloy
Products since July, 1992. Prior to that, he had served as Management Consultant
for Adastra, Inc.

MR. HARLAN was elected Vice President International on December
2, 1997. He had served as Vice President International-Europe since June 7,
1994. He had served as Vice President Business Development since August, 1993.
He had served as Senior Vice President, Sales and Marketing since October, 1991.
He had served as Vice President/General Manager, Alloy Division since January 1,
1987.

MR. LUBRANO was elected President - Technical Materials, Inc.
effective April, 1995 and Vice President and General Manager effective March,
1992. Prior to that, 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

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Inc. since April, 1989.

MR. SANDOR was elected Vice President Alloy Technology effective
March 5, 1996. He had served as Vice President Operations since October, 1991.
He had served as Senior Vice President since September, 1989.

MR. SKOCH was elected Vice President Administration and Human
Resources effective March 5, 1996. He had served as Vice President Human
Resources since July, 1991. Prior to that 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 9, 1998 there were 2,305 shareholders of record.
Information as to stock price and dividends declared set forth on page 20 in
Note O to the consolidated financial statements in the annual report to
shareholders for the year ended December 31, 1997 is incorporated herein by
reference. 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.

ITEM 6. SELECTED FINANCIAL DATA
- ------- -----------------------

Selected Financial Data on page 26 of the annual report to
shareholders for the year ended December 31, 1997 is incorporated herein by
reference.

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

RESULTS OF OPERATIONS

1997 to 1996 Comparison
- -----------------------

Sales in 1997 were a record $433.8 million, a 15% improvement
over 1996 sales of $376.3 million. Sales have increased for five consecutive
years, establishing record highs in each of the past four years.
Diluted earnings per share grew to $1.56 in 1997 from $1.53 in 1996.

Metal Systems sales, which are approximately 70% of total sales,
increased in 1997 over 1996. The primary markets for these products are
telecommunications, automotive and electronics. Aerospace, defense and plastic
tooling are smaller, but important markets as well. Major products included in
Metal Systems are beryllium, beryllium alloy strip and bulk and engineered
materials. These products offer a wide variety of performance characteristics
that are ideal in high reliability applications, and enable customers to improve
efficiencies and lower costs. Depending upon their form and application, these
products can provide superior electrical conductivity, formability, wear
resistance and high strength and hardness. Applications for these materials
include connectors, switches, relays, mold tooling, bushings, contacts and
structural components.

Alloy strip sales posted significant gains in 1997 over 1996 in
the domestic and international markets. Pounds shipped increased at a higher
rate than the sale values as a

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large portion of the additional sales was in relatively lower priced alloys. The
translation rate differences also adversely affected international sales. Strip
production was near capacity for most of the year. The new casting facility in
Elmore, Ohio, part of the three-year $117 million alloy expansion project,
started up on schedule late in the fourth quarter 1997. In addition to
increasing capacity, this equipment is designed to lower costs and improve
quality of beryllium alloy products. The strip mill portion of the expansion
project is scheduled to be completed in the summer of 1998.

Sales of alloy bulk products declined year on year due to lower
sales to the recreation and leisure market. The Company has now developed new
alloys and marketing strategies in attempts to regain its share in this
profitable, but somewhat seasonal and inconsistent, market. Bulk product sales
to other markets increased slightly in 1997 over 1996. To augment the markets
served by its traditional beryllium alloy bulk products, the Company recently
completed construction of a new facility in Lorain, Ohio, to produce a specialty
family of non-beryllium containing alloys in rod, bar and tube form. Production
in limited quantities began in the fourth quarter 1997 and the facility is
anticipated to be fully operational in 1998.

Sales of engineered material systems once again demonstrated
strong growth in the current year continuing a five-year trend of improving
revenues and profits. Engineered material systems include clad inlay or overlay
metals, contour profiling of metals, electron beam welded metal systems,
precious and base metal electroplating and solder-coated metal systems, or any
combinations of these systems. Capital investments to support and expand these
product offerings were made in 1997 and are planned to continue in 1998.

Beryllium sales also grew in 1997 from 1996. AlBeMet(R) sales,
while still relatively small, increased in the current year and the Company is
encouraged by its potential commercial applications. Investment cast products
also offer an opportunity for growth. Beryllium metal sales, primarily for
defense applications, were flat year on year.

Sales of Microelectronic Group products, which include precious
metals, ceramics and thick film circuits, increased dramatically in 1997 from
1996 to account for approximately 30% of the Company's total sales. The majority
of the sales growth was in precious metals, primarily physical vapor deposition
targets used in the optical data storage and hybrid electronic markets. Revenues
from the Company's gold refining operations increased in 1997 as well. Because
of the high precious metal content, the cost of which is passed through to
customers, these sales have a lower margin percent than the average margins
earned on the Company's other products. While profitable, the large increase in
precious metal sales has the effect of lowering the Company's overall gross
margin percent.

Ceramic sales were higher in 1997 than 1996 on the strength of
additional base beryllia ceramic sales to the telecommunications market. Direct
bond copper sales increased slightly, but their profitability remained
disappointing. Thick film circuit sales from Circuits Processing Technology,
Inc. ("CPT") were a minor contributor to the increased sales in 1997 from 1996.

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20

International operations consist of distribution centers in
Germany, England and Japan, a marketing office in Singapore and a precious metal
finishing facility in Singapore. In addition, in 1997, the Company entered into
a joint venture in Singapore to provide slitting and distribution facilities for
beryllium alloys. Sales by international operations totaled $88.7 million in
1997 compared to $74.8 million in 1996. Sales by these operations are
predominantly in their respective currencies while the majority of the
underlying cost of sales is incurred in dollars. In 1997, the U.S. dollar on
average strengthened 11% against the yen and 14% against the deutschmark from
1996, thereby reducing the comparative translated value of these sales and
resulting margins. The dollar's value against the yen and the deutschmark was
higher at December 31, 1997 than the average value for 1997. Direct exports to
unaffiliated customers were $53.7 million in 1997 and $33.6 million in 1996.
The majority of these sales are to North America and western Europe and are
denominated in dollars. International markets are essentially the same as in the
U.S.

As outlined in Note G to the Consolidated Financial Statements,
the Company has a foreign currency hedge program to protect against adverse
currency movements. Should the dollar strengthen significantly, the decrease in
value of foreign currency transactions will be partially offset by gains on the
hedge contracts. As of December 31, 1997, outstanding hedge contracts totaled
$25.9 million, compared to $25.0 million at year end 1996.

Gross margin was $113.0 million in 1997, a gain of $4.4 million
from 1996. However, the margin percentage declined to 26.1% of sales from 28.9%.
The two major causes for the decline in the percentage were the effects of the
stronger dollar and the large increase in precious metal products that carry
smaller margins as previously discussed. Capacity constraints at several
facilities created additional cost pressures (increased overtime, limited
availability of the optimal equipment, etc.). Tempering these effects was the
increase in beryllium strip sales earning greater margins. The Utah beryllium
extraction facility operated at very efficient levels in 1997. The cost of
copper, typically passed through to beryllium alloy customers, was essentially
flat year on year. Selling prices in general were fairly stable during 1997.

Selling, administrative and general expenses were $69.0 million
or 15.9% of sales in 1997 compared to $65.0 million or 17.2% of sales in 1996.
Costs associated with the start-up of the new facility in Lorain, Ohio and
charges for the company-owned life insurance program were two main causes for
the increase. The expense portion of the new computer based information system
project, begun in 1996, continued into 1997.

Research and development (R&D) expenses were $7.7 million or
1.8% of sales in 1997, a decline from $8.3 million or 2.2% of sales in 1996.
Expenses were lower in 1997 in part because of reimbursements for R&D work
performed under government contracts. Additionally, two major initiatives in
1996 achieved their objectives in early 1997 and, therefore, caused a reduction
in expenditures. The Company is planning on increasing its investment and
staffing in R&D in order to continue developing new products and technologies.

Other-net expense was $0.3 million in 1997 and $1.0 million in
1996. Foreign

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21

currency hedge gains were higher in 1997 than 1996 while goodwill expense was
lower in 1997. Partially offsetting these benefits was an increase in the cost
of financing the consigned platinum and palladium stocks that support a portion
of the precious metal business. Major disruptions to the supply of metal in the
international markets in the summer of 1997 caused the higher rates. By the end
of 1997, financing rates had significantly declined, although they still were
higher than the typically nominal rates of prior years. The Company has taken
additional measures to reduce its exposures.

Interest expense was $0.6 million in 1997 versus $1.1 million in
1996 net of capitalized interest associated with long-term capital projects of
$1.9 million in 1997 and $1.0 million in 1996. The higher incurred interest
expense in 1997 was the result of increased borrowings, as the weighted average
interest rate declined slightly in 1997 from 1996.

Income before income taxes was $35.5 million in 1997, an
increase of $2.3 million from 1996. As explained above, this improvement was due
to higher sales volume generating an increase in margin that was partially
offset by an unfavorable currency effect and higher expenses.

The Company's effective tax rate was 27.8% of pre-tax earnings
in 1997 compared to 26.2% in 1996. Higher earnings and a decreased tax benefit
from the company-owned life insurance program caused the increase in the rate.
Adjustments to the statutory tax rate are detailed in Note I to the Consolidated
Financial Statements.

Comparative basic earnings per share were $1.58 in 1997 and
$1.55 in 1996. Diluted earnings per share were $1.56 in 1997 and $1.53 in 1996.
All earnings per share calculations have been restated to comply with SFAS No.
128, which revised the methodology for determining the weighted average shares
outstanding. (See Note J to the Consolidated Financial Statements for a
reconciliation of basic and diluted earnings per share.)

1996 to 1995 Comparison
- -----------------------

Worldwide sales in 1996 were $376.3 million compared to $369.6
million achieved in 1995. The revenue growth came primarily from domestic
beryllium alloy products and engineered material systems. The resulting profits
grew faster than sales, as diluted earnings per share were $1.53 in 1996, an
improvement of 20% over the prior year.

Worldwide sales of beryllium alloys increased in 1996 over 1995.
Domestically, sales of beryllium copper precision strip, rod and wire were
higher as shipments to the automotive electronics and telecommunications markets
grew. Sales of bulk products (bar, tube, plate, custom fabricated parts) also
increased in 1996, further penetrating the aerospace, plastic tooling and
various industrial markets. The recreation and leisure market emerged as a
potentially large application for bulk products; however, with a limited
customer base, sales into this market are seasonal and inconsistent from year to
year.

International sales of beryllium alloys declined in 1996
compared to 1995 as a

20
22

result of softening economic conditions in Germany and other portions of western
Europe. The sales growth in Japan and the Pacific rim slowed down from recent
years, but modest improvements were still recorded. The stronger dollar in 1996
relative to 1995 also contributed to the reported international sales decline,
as foreign currency sales are translated into fewer dollars compared to 1995.
The domestic beryllium alloy growth more than offset the international decline.

Sales of engineered material systems grew in 1996 over 1995. The
gains came primarily from the telecommunications market, with some additional
contribution from the automotive market as well. Semiconductor shipments were
quite strong in the first part of the year, but a major market slow down
adversely affected second half sales.

Precious metal sales were down in 1996 from 1995's levels, but
sales in the second half 1996 were higher than in the second half 1995. An
anticipated decline in frame lid assemblies occurred due to a major customer's
re-design to a non-precious metal material in the second quarter 1995. Efforts
to broaden the product offering have been successful through the continued
development of physical vapor deposition products and services and high
temperature braze alloys. Fine wire sales remained minor. International sales
declined in 1996 from 1995, reflecting the drop-off in frame lid assembly
shipments.

Beryllium sales slowed slightly in 1996 as compared to 1995.
Defense applications remain the largest portion of these sales, but at
significantly lower levels resulting from reduced government defense spending in
recent years. Commercial applications, particularly those using AlBeMet(R) (a
beryllium aluminum alloy) are beginning to develop. AlBeMet(R)'s high stiffness
and low density provide excellent properties for a variety of aerospace and
telecommunications applications.

Ceramic sales slipped in 1996 from 1995 levels due to a slowdown
in shipments of base business beryllia ceramic to the telecommunications and
automotive industries. The growth in direct bond copper products was not
sufficient to compensate as these products continue to experience development
delays.

CPT was acquired in late October 1996 by the Company and
contributed a minor amount to sales and profits. CPT, which produces thick film
circuits using a proprietary etching process, gives the Company an additional
entree into the microelectronics market.

Sales from international operations totaled $74.8 million in
1996 compared to $91.2 million in 1995. Direct exports to unaffiliated customers
totaled $33.6 million in 1996 and $36.1 million in 1995.

Cost of sales declined by $1.0 million in 1996 from 1995 on
higher sales, resulting in a $7.7 million improvement in gross profit. Improved
operating efficiencies, including higher yields on certain products, better
utilization of available capacity, effective use of recycled materials and
strong cost control measures, increased the gross margin to 28.9% of sales in
1996 from 27.3% in 1995. Stable prices and product mix helped to offset the
negative margin

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23

impact of the stronger dollar. The lower copper cost in 1996, as compared to
1995, was passed through to the customer and thus had no impact on gross margin.

Selling, administrative and general expenses of $65.0 million
represent a 4% increase over the prior year. Expenses associated with the first
phase of implementing an enterprise-wide information system caused a portion of
the increase. The project will carry over into 1997 and beyond. Additional
administrative and legal expenses were incurred to support and structure the
alloy expansion project and the related financial arrangements. Compensation
plans carried higher costs in 1996 and certain sales volume related expenses
increased in 1996 as well.

Research and development (R&D) expenses grew to $8.3 million or
2.2% of sales in 1996 from $7.8 million or 2.1% of sales in 1995. The increase
is predominantly from efforts to develop a new high quality, low cost precision
beryllium copper strip and in-house investment casting technology. The R&D
staffing was also increased. Expenditures on non-beryllium alloy R&D were flat.

Other-net expense was $1.0 million in 1996 and $1.3 million in
1995. Foreign currency gains account for the improvement.

Interest expense fell to $1.1 million in 1996 from $1.7 million
in 1995. These figures are net of capitalized interest associated with long-term
capital projects of $1.0 million in 1996 and $0.4 million in 1995. The weighted
average interest rate was essentially unchanged year on year.

Income before income taxes was $33.2 million in 1996, a 20.9%
improvement from 1995. Slightly higher sales and significantly improved margins
were responsible for the increase.

An effective tax rate of 26.2% of pre-tax earnings was used in
1996, an increase from the 24.6% rate in 1995. Increased pre-tax earnings,
reduced foreign tax benefits and a reduction in the allowable tax benefits from
the company-owned life insurance program as a result of a change in the tax law
caused the higher rate. Adjustments to the statutory tax rate are detailed in
Note I to the Consolidated Financial Statements.

Comparative basic earnings per share were $1.55 in 1996 and
$1.28 in 1995 and diluted earnings per share were $1.53 in 1996 and $1.27 in
1995.

FINANCIAL POSITION
CAPITAL RESOURCES AND LIQUIDITY

Cash flow from operations was $40.4 million in 1997 down from
$45.0 million in 1996. Accounts receivable increased $12.7 million since the
prior year end as a result of the 24% growth in fourth quarter sales; the
collection period remains essentially unchanged. Inventory declined by $3.7
million in large part as a result of the strong demand for the

22
24

Company's products. The cash balance at December 31, 1997, was $7.2 million
compared to $31.7 million at the prior year end. As discussed below, the
increase in capital expenditures is the main cause for the decline in cash.

The aforementioned $117 million alloy expansion project begun in
1996 is being financed, in part, by two operating leases totaling approximately
$81.1 million (See Note F to the Consolidated Financial Statements). Payments
under the facility lease began in December 1997 and payments under the equipment
lease will begin in 1999. Equipment lease payments are graduated to increase
over time.

Capital expenditures for property, plant and equipment totaled
$53.2 million, excluding items under lease. Included in this total is the
construction cost of the new manufacturing facility in Lorain, Ohio, which was
financed in part by tax-advantaged industrial revenue bonds, a portion of the
alloy expansion project in Elmore, Ohio, and new plating lines and related
equipment at the Lincoln, Rhode Island facility. Capital expenditures in 1997
were significantly higher than in recent years and expenditures in 1998 are
anticipated to approximate 1997's level.

New bertrandite mine pits in Utah were developed at a total cost
of $13.2 million, including $3.7 million expended in 1996. The pits have an
average life of four to five years.

In 1996, the Company initiated a project to implement a new
computer-based information system replacing the majority of its older systems.
The new system was designed primarily to improve the efficiency of information
flow, but it also mitigates the requirements to make numerous old systems year
2000 compliant. The new system is anticipated to be substantially implemented by
the end of 1998 and have a capitalized cost of approximately $15 million. Year
2000 compliant costs for the remaining legacy systems are estimated at
approximately five cents per share in 1998. The Company anticipates that the
majority of its systems will be year 2000 compliant by the end of 1998. The
Company does not believe it is materially dependent upon any vendor or customer
who may have a year 2000 compliance problem.

Short-term debt at year end 1997 was $28.9 million, an increase
of $3.2 million from the prior year end. Included in this amount is $0.8 million
of the current portion of long-term debt with the balance denominated in
precious metals and foreign currencies to provide hedges for assets so
denominated. Credit lines amounting to $54.8 million are available for
additional borrowing. The precious metal facility is committed, secured and
renewed annually. All other lines are uncommitted, unsecured and renewed
annually.

Long-term debt on the balance sheet was $17.9 million at
December 31, 1997, compared to $18.9 million at December 31, 1996. Long-term
available financial resources include $70 million of medium-term notes and $55
million under a revolving credit agreement.

The Company repurchased 205,600 shares of Common Stock at a cost
of $4.9 million in 1997 under a program authorized by the Board of Directors in
the second quarter

23
25

1997. The purpose of the program is to help offset the dilutive effect of
exercisable stock options and other stock-based compensation. Common stock was
used to acquire CPT in the fourth quarter 1996, increasing the number of
outstanding shares. Dividends paid in 1997 were $7.3 million, an increase of
$0.8 million from 1996. The quarterly dividend per share increased to $0.12 from
$0.11 in the third quarter 1997 following a similar increase in the third
quarter 1996.

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

Cash flow from operating activities in 1996 was $45.0 million. Cash balances
increased $2.2 million while total balance sheet debt increased $4.8 million
during 1996. Capital expenditures and mine development expenditures were $30.5
million in 1996. The Company re-purchased $6.7 million of Common Stock and paid
$6.5 million dividends in 1996.

24
26

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.

1997 1996 1995 1994 1993
---- ---- ---- ---- ----

Proven bertrandite ore reserves at
year-end (thousands of dry tons) 6,924 6,763 6,927 6,747 6,786
Grade % beryllium 0.249 0.249 0.249 0.251 0.251

Probable bertrandite ore reserves at
year-end (thousands of dry tons) 6,750 7,432 7,346 7,559 7,594
Grade % beryllium 0.277 0.281 0.281 0.279 0.279

Bertrandite ore processed (thousands
of dry tons, diluted) 110 97 96 79 92
Grade % beryllium, diluted 0.229 0.236 0.232 0.240 0.232

INFLATION AND CHANGING PRICES

The prices of certain major raw materials, including copper, nickel, gold 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 employs the last-in, first-out (LIFO)
inventory valuation method domestically to more closely match current costs with
revenues.

ENVIRONMENTAL MATTERS

As indicated in Note M to the Consolidated Financial Statements, page 18 of the
Annual Report to Shareholders for the year ended December 31, 1997, 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 $5.1 million at December 31, 1997 ($4.0 million at December 31, 1996).
This reserve covers existing and currently foreseen projects.

25
27

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
- ------- -------------------------------------------

The report of independent auditors and the following
consolidated financial statements of the Company included in the annual report
to shareholders for the year ended December 31, 1997 are incorporated herein by
reference:

Consolidated Balance Sheets - December 31, 1997 and 1996.

Consolidated Statements of Income - Years ended December 31, 1997, 1996
and 1995.

Consolidated Statements of Shareholders' Equity - Years ended December
31, 1997, 1996 and 1995.

Consolidated Statements of Cash Flows - Years ended December 31, 1997,
1996 and 1995.

Notes to Consolidated Financial Statements.

Report of Independent Auditors.

Quarterly Data on page 20 of the annual report to shareholders for the years
ended December 31, 1997 and December 31, 1996 is incorporated herein by
reference.

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

None

26
28

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
- -------- --------------------------------------------------

The information under Election of Directors on pages 2 through
5 of the Proxy Statement dated March 16, 1998 is incorporated herein by
reference. Information with respect to Executive Officers of the Company is set
forth earlier on pages 15 and 16 of this Form 10-K annual report.

ITEM 11. EXECUTIVE COMPENSATION
- -------- ----------------------

The information under Executive Officer Compensation on pages
8 through 12 of the Proxy Statement dated March 16, 1998 is incorporated herein
by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- -------- --------------------------------------------------------------

The information under Common Stock Ownership of Certain
Beneficial Owners, Directors and Management on pages 6 and 7 of the Proxy
Statement dated March 16, 1998 is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- -------- ----------------------------------------------

Not applicable.

27
29

PART IV

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

(a) 1. Financial Statements and Supplemental
Information
-------------------------------------------------
Included in Part II of this Form 10-K annual report
by reference to the annual report to shareholders for
the year ended December 31, 1997 are the following
consolidated financial statements:

Consolidated Balance Sheets - December 31, 1997 and
1996.

Consolidated Statements of Income - Years ended
December 31, 1997, 1996 and 1995.

Consolidated Statements of Shareholders' Equity -
Years ended December 31, 1997, 1996 and 1995.

Consolidated Statements of Cash Flows - Years ended
December 31, 1997, 1996 and 1995.

Notes to Consolidated Financial Statements.

Report of Independent Auditors.

(a) 2. Financial Statement Schedules
-----------------------------

The following consolidated financial information for
the years 1997,1996 and 1995 is submitted herewith:

Schedule II - Valuation and qualifying accounts.

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.

28
30

(a) 3. Exhibits
--------

(3a) Second Amended and Restated Articles of
Incorporation of the Company dated
January 27, 1998.

(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), 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), 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.

(4d) Rights Agreement between the Company and
National City Bank N.A. dated January 27,
1998.

(4e) 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),
incorporated herein by reference.

(4f) 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.

(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), incorporated
herein by reference.

(10b)* Form of Employment Agreement entered into by
the Company and Messrs. Brophy, Hanes,
Harlan, Rozek and 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), incorporated herein by
reference.

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

(10c)* Form of Amendment to the Employment
Agreement (dated February 20, 1989) entered
into by the Company and Messrs. Brophy,
Hanes, Harlan, Rozek and 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),
incorporated herein by reference.

(10d)* 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, Mr. Carl Cramer dated
December 6, 1994 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),
incorporated herein by reference.

(10e)* Form of Trust Agreement between the Company
and Key Trust Company of Ohio, N.A.
(formerly Ameritrust Company National
Association) on behalf of Messrs. Brophy,
Hanes, Harlan, Rozek and Sandor dated
February 20, 1989, Mr. Harnett dated
March 20, 1991 and Mr. Skoch dated
January 28, 1992, Mr. Freeman dated
August 3, 1993, Mr. Cramer dated
December 6, 1994 and Mr. Brian J. Derry
dated May 6, 1997 (filed as Exhibit 10e
to the Company's Form 10-K Annual Report
for the year ended December 31, 1994),
incorporated herein by reference.

(10f) Form of Indemnification Agreement entered
into by the Company and Mr. G. D. Harnett on
March 20, 1991 (filed as Exhibit 10f to the
Company's Form 10-K Annual Report for the
year ended December 31, 1994), incorporated
herein by reference.

(10g) Form of Indemnification Agreement entered
into by the Company and Messrs. J. H.
Brophy, A. J. Sandor, C. B. Harlan, H. D.
Hanes, and R. H. Rozek on June 27, 1989,
Mr. D. A. Skoch on January 28, 1992, Mr. S.
Freeman dated August 3, 1993, Mr. C. Cramer
on December 6, 1994, Messrs. M. D. Anderson,
A. T. Lubrano, S. A. Moyer and J. J.
Paschall on January 19, 1996, and Messrs.
Brian J. Derry and Jordon P. Frazier on
May 6, 1997 (filed as Exhibit 10g to the
Company's Form 10-K Annual Report for the
year ended December 31, 1994), incorporated
herein by reference.

(10h) Form of Indemnification Agreement entered
into by the Company and Messrs. C. F. Brush
III, F. B. Carr, W. P. Madar, G. C.
McDonough, R. M. McInnes, H. G. Piper and
J. Sherwin Jr. on June 27, 1989, Mr. A. C.
Bersticker on April 27, 1993, Mr. D. L.
Burner on May 2, 1995, Mr. James P. Mooney
on October 1, 1996, Mr. J. P. Keithley on
August 5, 1997 and Mr. W. P. Robertson on
December 2, 1997 (filed as Exhibit 10h to
the Company's Form 10-K Annual Report for
the year ended December 31, 1994),
incorporated herein by reference.

(10i)* Directors' Retirement Plan as amended
January 26, 1993 (filed as Exhibit 10i to
the Company's Form 10-K Annual Report for
the year ended December 31, 1992),
incorporated herein by reference.

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

(10j)* 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.

(10k)* 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), incorporated
herein by reference.

(10l)* 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), incorporated herein by
reference.

(10m)* 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),
incorporated herein by reference.

(10n)* Amendment Number 3, adopted February 8,
1995, 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, 1994), incorporated herein by
reference.

(10o)* 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), incorporated herein by
reference.

(10p)* 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), incorporated herein by
reference.

(10q)* 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.

(10r)* 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.

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

* Reflects management contract or other compensatory arrangement required to be
filed as an Exhibit pursuant to Item 14(c) of this Report.
33

(10t)* 1990 Stock Option Plan for Nonemployee
Directors (filed as Exhibit 4.6 to
Registration Statement No. 33-35979),
incorporated herein by reference.

(10u)* 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.

(10v) 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.

(10w) 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.

(10x)* 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.

(13) Portions of the Annual Report to
shareholders for the year ended December 31,
1997.

(21) Subsidiaries of the registrant.

(23) Consent of Ernst & Young LLP.

(24) Power of Attorney.

(27.1) Financial Data Schedule 1997.

(27.2) Financial Data Schedule 1996 Restated.

(27.3) Financial Data Schedule 1995 Restated.

(99) Form 11-K Annual Report for the Brush
Wellman Inc. Savings and Investment Plan for
the year ended December 31, 1997.

(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, 1997.

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

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 27, 1998

BRUSH WELLMAN INC.

By: /s/Gordon D. Harnett By: /s/Carl Cramer
------------------------------------ ----------------------------
Gordon D. Harnett Carl Cramer
Chairman of the Board, Vice President and
President and Chief Executive Officer 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.

GORDON D. HARNETT* Chairman of the Board,
- --------------------------- President, Chief Executive
Gordon D. Harnett Officer and Director March 27, 1998
(Principal Executive Officer)

CARL CRAMER Vice President and Chief March 27, 1998
- --------------------------- Financial Officer
Carl Cramer

ALBERT C. BERSTICKER* Director March 27, 1998
- ---------------------------
Albert C. Bersticker

CHARLES F. BRUSH, III* Director March 27, 1998
- ---------------------------
Charles F. Brush, III

DAVID L. BURNER* Director March 27, 1998
- ---------------------------
David L. Burner

JOSEPH P. KEITHLEY * Director March 27, 1998
- ---------------------------
Joseph P. Keithley

WILLIAM P. MADAR* Director March 27, 1998
- ---------------------------
William P. Madar

ROBERT M. McINNES* Director March 27, 1998
- ---------------------------
Robert M. McInnes

WILLIAM R. ROBERTSON Director March 27, 1998
- ---------------------------
William R. Robertson

JOHN SHERWIN, JR.* Director March 27, 1998
- ---------------------------
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/Carl Cramer
-----------------------------
Carl Cramer March 27, 1998
Attorney-in-Fact

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

BRUSH WELLMAN INC. AND SUBSIDIARIES

YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995

- ------------------------------------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E
- ------------------------------------------------------------------------------------------------------------------------------------
ADDITIONS
--------------------------------------
DESCRIPTION Balance at Beginning (1) (2) Deduction-Describe Balance at End
of Period Charged to Costs Charged to Other of Period
and Expenses Accounts-Describe
- ------------------------------------------------------------------------------------------------------------------------------------

Year ended December 31, 1997
Deducted from assets 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

Year ended December 31, 1996
Deducted from assets accounts:
Allowance for doubtful
accounts receivable $1,014,704 $29,455 $0 $89,870 (A) $954,289
Inventory reserves and
obsolescence $1,600,000 $2,656,779 $0 $2,538,984 (B) $1,717,795

Year ended December 31, 1995
Deducted from assets accounts:
Allowance for doubtful
accounts receivable $1,036,797 $203,213 $0 $225,306 (A) $1,014,704
Inventory reserves and
obsolescence $1,466,039 $1,590,856 $0 $1,456,895 (B) $1,600,000

Note A - Bad debts written-off.
Note B - Inventory write-off.