<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ X ]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
[ ]
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 1-5881
------
BROWN & SHARPE MANUFACTURING COMPANY
------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 050113140
-------- ---------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Precision Park, 200 Frenchtown Road, North Kingstown, Rhode Island 02852
-------------------------------------------------------------------------
(Address of principal executive offices and zip code)
(401) 886-2000
--------------
(Registrant's telephone number, including area code)
---------------------------------------------------------------
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 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 the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date; 8,163,820 Class A common
stock, 530,958 Class B common stock, par value $1 per share, outstanding as of
June 30, 1995.
<PAGE>
PART I. FINANCIAL INFORMATION
---------------------
Item 1. FINANCIAL STATEMENTS*
------ --------------------
BROWN & SHARPE MANUFACTURING COMPANY
------------------------------------
CONSOLIDATED STATEMENT OF INCOME (LOSS)
---------------------------------------
(Dollars in Thousands Except Per Share Data)
(Unaudited)
<TABLE>
<CAPTION>
For the Quarter Ended For the Half-Year Ended
----------------------- -------------------------
June 30, 1995 July 2, 1994 June 30, 1995 July 2, 1994
------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Net sales $ 80,967 $ 43,152 $155,062 $ 79,811
Cost of goods sold 57,263 29,397 108,174 55,337
Selling, general and
administrative expense 20,358 13,610 43,090 25,871
Restructuring expense 117 - 247 -
------- ------- ------- -------
Operating profit (loss) 3,229 145 3,551 (1,397)
Interest expense 2,224 1,443 3,948 2,723
Other income, net 40 130 187 178
------- ------- ------- -------
Income (loss) before income taxes 1,045 (1,168) (210) (3,942)
Income tax provision - 200 200 300
------- ------- ------- -------
Net income (loss) $ 1,045 $ (1,368) $ (410) $ (4,242)
======= ======= ======= =======
Primary and fully diluted
income (loss) per common share $ .12 $ (.26) $ (.05) $ (.83)
======= ======= ======= =======
Weighted average shares
outstanding and common
stock equivalents
during the period 8,705,241 5,191,299 8,691,487 5,114,403
========= ========= ========= =========
</TABLE>
* The accompanying notes are an integral part of the financial statements.
<PAGE>
BROWN & SHARPE MANUFACTURING COMPANY
------------------------------------
CONSOLIDATED BALANCE SHEET
--------------------------
(Dollars in Thousands)
<TABLE>
<CAPTION>
June 30, 1995 December 31, 1994
ASSETS (Unaudited) -----------------
Current Assets: -------------
<S> <C> <C>
Cash and cash equivalents $ 6,571 $ 6,676
Accounts receivable, net of allowances for
doubtful accounts of $3,995 and $3,103 101,238 108,234
Inventories 98,950 88,639
Deferred income taxes, less $38,100 valuation allowance 2,000 2,000
Prepaid expenses and other current assets 8,615 5,981
-------- --------
Total current assets 217,374 211,530
Property, plant and equipment:
Land 7,293 6,858
Buildings and improvements 37,052 33,124
Machinery and equipment 96,296 85,583
-------- --------
140,641 125,565
Less-accumulated depreciation 91,063 80,210
-------- --------
49,578 45,355
Other assets 15,001 15,389
-------- --------
$281,953 $272,274
======== ========
LIABILITIES AND SHAREOWNERS' EQUITY
Current Liabilities:
Notes payable and current
installments of long-term debt $ 41,677 $ 22,398
Accounts payable 43,552 36,896
Accrued expenses and income taxes 42,248 49,353
-------- --------
Total current liabilities 127,477 108,647
Long-term debt 59,732 70,215
Deferred income taxes 1,355 1,737
Unfunded accrued pension cost 5,863 5,035
Termination indemnities 7,821 7,715
Shareowners' Equity:
Preferred stock, $1 par value;
authorized 1,000,000 shares - -
Common stock:
Class A, par value $1; authorized 15,000,000
shares; issued 8,187,412 shares in 1995
and 8,122,086 shares in 1994 8,187 8,122
Class B, par value $1; authorized 2,000,000 shares;
issued and outstanding 530,958 shares in 1995
and 534,821 shares in 1994 531 535
Additional paid in capital 66,863 66,412
Earnings employed in the business (10,366) (9,958)
Cumulative foreign currency translation adjustment 15,217 14,530
Treasury stock: 23,592 shares in 1995 and 7,492
in 1994 at cost (270) (151)
Unearned compensation (457) (565)
-------- --------
Total shareowners' equity 79,705 78,925
-------- --------
$281,953 $272,274
======== ========
</TABLE>
* The accompanying notes are an integral part of the financial statements.
<PAGE>
BROWN & SHARPE MANUFACTURING COMPANY
------------------------------------
CONSOLIDATED STATEMENT OF CASH FLOWS
------------------------------------
(Dollars in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
For the Half-Year Ended
-----------------------
June 30, 1995 July 2, 1994
------------- -------------
<S> <C> <C>
Cash Provided by (Used in) Operations:
Net income (loss) $ (410) $(4,242)
Adjustment for Noncash Items:
Depreciation and amortization 4,094 2,884
Pension credits and charges 27 224
Deferred income taxes - 100
Unfunded pension 208 498
Termination Indemnities 46 -
Changes in Working Capital:
Accounts receivable 9,699 3,717
Inventories (4,431) 1,106
Prepaid expenses and other current assets (2,424) (457)
Accounts payable and accrued expenses (3,866) (3,991)
------- -------
Net Cash Provided by (Used in) Operations 2,943 (161)
------- -------
Investment Transactions:
Capital expenditures (3,933) (1,363)
Cash equivalent pledged - (69)
Other investing activities 619 (213)
------- -------
Cash (Used in) Investment Transactions (3,314) (1,645)
------- -------
Financing Transactions:
Increase in long-term and short-term debt 9,976 4,902
Payment of long-term and short-term debt (4,998) (2,276)
Other financing activities 503 (103)
------- -------
Cash Provided by Financing Transactions 5,481 2,523
------- -------
Effect of Exchange Rate Changes on Cash (5,215) (528)
------- -------
Cash and Cash Equivalents:
Increase (Decrease) during the period (105) 189
Beginning balance 6,676 2,094
------- -------
Ending balance $ 6,571 $ 2,283
======= =======
Supplementary Cash Flow Information:
Interest paid $ 3,811 $ 2,547
======= =======
Taxes paid $ 1,633 $ 730
======= =======
</TABLE>
* The accompanying notes are an integral part of the financial statements.
<PAGE>
BROWN & SHARPE MANUFACTURING COMPANY
------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
(Dollars in Thousands)
1. The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-Q
and Article 10 of Regulations S-X. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the quarter and half-year periods ended June 30, 1995 are not
necessarily indicative of the results that may be expected for the year
ended December 31, 1995. For further information, refer to the
consolidated financial statements and footnotes thereto included in the
Brown & Sharpe Manufacturing Company's annual report on Form 10-K for the
year ended December 31, 1994.
2. The Company has changed its accounting period ending dates to a calendar
month and year end basis beginning in 1995. Prior to 1995, the accounting
year ended on the last Saturday in December. The first half of 1995 and
1994 consisted of 26 and 27 weeks, respectively, while the second quarters
of 1995 and 1994 consisted of 13 weeks each.
3. The composition of inventory is as follows:
<TABLE>
<CAPTION>
June 30, 1995 Dec. 31, 1994
------------- -------------
<S> <C> <C>
Parts, raw materials, and supplies $ 42,790 $ 42,665
Work in process 20,644 17,069
Finished goods 35,516 28,905
------- -------
$ 98,950 $ 88,639
======= =======
</TABLE>
4. Income taxes include provisions for U.S. federal, state, and foreign income
taxes and is based on the Company's estimate of effective income tax rates
for the full year. The current tax provision for the first half of 1995
and 1994 is $200 and $300, respectively.
5. In 1994, and for the half-year period ended June 30, 1995, earnings (loss)
per share was based upon the weighted average number of common shares
outstanding for the periods presented since inclusion of common stock
equivalents would be antidilutive. Primary earnings per share for the
quarter ended June 30, 1995 is based upon the weighted average number of
common shares outstanding and common stock equivalents. Fully diluted
earnings per share are not materially different.
6. On April 7, 1995, the U.S. Court of Appeals for the District of Columbia
Circuit rendered a decision on the second appeal by the International
Association of Machinists and Aerospace Workers (the "IAM") of a
supplemental decision and order of the National Labor Relations Board
("NLRB") reaffirming an April 1986 decision of the NLRB dismissing
reinstated unfair labor practice charges brought against the Company by the
IAM in September 1982. These charges arose out of a strike which began at
the Company's Rhode Island operations in October 1981. Although the NLRB
has previously upheld dismissal of the reinstated unfair labor practices
charges, the Appeals Court in its latest decision has stated that the NLRB
failed to articulate and apply a judicially acceptable standard to
determine whether certain evidence offered and characterized by the Union
as being newly discovered was material and of such a nature to justify
tolling the statute of limitations so as to permit the filing of the
reinstated unfair labor practice charges. The Court vacated the judgment
of the NLRB favorable to the Company and has remanded the case back to the
NLRB for further proceedings to determine these evidentiary issues and
their effect on the application of the statute of limitations to the
reinstated unfair labor
<PAGE>
practice charges. The Court has directed that should the NLRB rule against
the Company on the evidentiary issues presented for consideration then it
must proceed to determine the merits of the reinstated unfair labor
practice charges. Management of the Company and its counsel believe the
NLRB is not likely to rule that the case must go forward on its merits and
that a finding of liability against the Company in this matter continues to
be remote.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
------ OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
------------------------------------------------
Brown & Sharpe Manufacturing Company acquired the DEA Group metrology businesses
on September 28, 1994, as reported in the Company's Annual Report on Form 10-K
for the year 1994. The acquisition has been accounted for using the purchase
method of accounting, and, accordingly, the consolidated statements of income
(loss) and cash flow for the first two quarters of 1995 include the results of
the acquired operations. However, DEA's results are not included for the first
three quarters of 1994. The ending consolidated balance sheet for both periods
presented (June 30, 1995 and December 31, 1994) includes their assets and
liabilities.
The following table sets forth the percentage of net sales of Brown & Sharpe
represented by the components of income and expense for the quarters and half
years ended June 30, 1995 and July 2, 1994:
<TABLE>
<CAPTION>
Quarters Ended Half-Years Ended
-------------- ----------------
June 30 July 2 June 30 July 2
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of goods sold 70.7 68.1 69.7 69.3
Selling, general and administrative expense 25.2 31.6 27.8 32.5
Restructuring charges .1 - .2 -
----- ----- ----- -----
Operating profit (loss) 4.0 .3 2.3 (1.8)
Interest expense 2.7 3.3 2.6 3.3
Other income, net - .3 .1 .2
----- ----- ----- -----
Income (loss) before income taxes 1.3 (2.7) (.2) (4.9)
Income tax provision - .5 .1 .4
----- ----- ----- -----
Net income (loss) 1.3% (3.2)% (.3)% (5.3)%
===== ===== ===== =====
</TABLE>
RESULTS OF OPERATIONS
(Quarter Ended June 30, 1995 compared to Quarter Ended July 2, 1994)
Orders and Backlog. Orders during the second quarter of 1995 totaled $78.2
million compared to $46.8 million for the second quarter of 1994. DEA, which
was acquired on September 28, 1994, represented $26.1 million in orders during
the second quarter of 1995, and foreign currency fluctuations caused a $5.2
million increase in second quarter 1995 orders compared to the second quarter of
1994. The second quarter, after reflecting the effect of DEA and foreign
exchange, includes increased orders in the Precision Measuring Instruments
Division offset by reduced orders for the Measuring Systems Division. Backlog
at June 30, 1995 decreased to $66.2 million compared to $69.3 million at the end
of the first quarter 1995.
Net Sales. Net sales in the second quarter of 1995 were $81.0 million, compared
to $43.2 million in the second quarter of 1994. DEA's sales were $27.6 million
in the second quarter of 1995. In addition, foreign currency exchange rate
fluctuations caused an increase in net sales in the second quarter of 1995 of
$5.1 million as compared to the second quarter of 1994.
Gross Profit. Gross profit margin decreased to 29.3% of sales in the second
quarter of 1995 from 31.9% in the second quarter of 1994. The majority of this
percent decrease resulted from increased inventory valuation reserves of $1.3
million.
Selling, General and Administrative Expense. Selling, general and
administrative expense as a percentage of net sales decreased to 25.2% in the
second quarter of 1995 from 31.6% in the second quarter of 1994, reflecting the
benefits of the acquisition consolidation savings actions of the Company.
Dollar spending, however, increased $6.7 million in the second quarter of 1995
from the second quarter
<PAGE>
of 1994 which was primarily due to the inclusion of DEA selling, general and
administrative expense in the second quarter of 1995 amounting to $6.6 million,
which was not included in the second quarter of 1994. The second quarter of
1995 also included an accrual of $.6 million which was recorded to reflect
benefits payable to the former President and Chief Executive Officer who
resigned and was replaced, as previously announced by the Company at the 1995
Annual Meeting on May 3, 1995. In addition, $2.0 million of realized and
unrealized foreign exchange gains were recognized in the same quarter. Realized
and unrealized foreign exchange losses amounted to $.1 million in the second
quarter of 1994.
Restructuring Charges. Restructuring charges of $.1 million, were provided for
in the second quarter of 1995, principally for Brown & Sharpe employee severance
and Brown & Sharpe sales offices closing costs, associated with integrating
Brown & Sharpe's existing operations with those of DEA, acquired on September
28, 1994.
Operating Profit (Loss). Operating profit was $3.2 million in the second
quarter of 1995. This compared to an operating profit of $.1 million in the
second quarter of 1994. In the United States, an operating loss of $1.1 million
was recognized for the second quarter of 1995 compared to an operating profit of
$1.3 million in the second quarter of 1994. Foreign operations had an operating
profit of $4.3 million in the second quarter of 1995 as compared to an operating
loss of $1.2 million in the second quarter of 1994. The improved second quarter
operating results reflect the specific items noted above and reflect, overall,
the benefit of the integration of the DEA and Roch acquisitions as well as the
impact of the strengthening European economies offset by weaker operating
results in the United States, due to a product mix that resulted in reduced
margins.
Interest Expense. Interest expense totaled $2.2 million in the second quarter
of 1995 compared to $1.4 million in the second quarter of 1994. This increase
reflects a $28.8 million increase in borrowings over the comparable period in
1994. $13.8 million of the increase resulted from debt related to the DEA
acquisition, and $11.6 million, including $6.7 million borrowed in the second
quarter of 1995, resulted from additional working capital requirements,
including additional costs related to restructuring. The remainder of the
increase is due to changes in foreign exchange rates on offshore borrowings.
Net Income/(Loss). Brown & Sharpe had a net income of $1.0 million ($.12 per
share) in the second quarter of 1995, compared to a net loss of $1.4 million
($.26 per share) in the second quarter of 1994.
RESULTS OF OPERATIONS
(Half-Year Ended June 30, 1995 compared to Half-Year Ended July 2, 1994)
Orders and Backlog. Orders during the first half-year of 1995 totaled $157.3
million compared to $84.7 million for the first half-year of 1994. DEA which
was acquired on September 28, 1994, represented $51.8 million in orders during
the first half of 1995, and foreign currency fluctuations caused a $10.4 million
increase in first half 1995 orders compared to the first half of 1994. Backlog
at June 30, 1995 increased to $66.2 million compared to $61.0 million at year-
end 1994.
Net Sales. Net sales in the first half of 1995 were $155.1 million compared to
$79.8 million for the first half of 1994. DEA's sales were $52.8 million in the
first half of 1995. Foreign currency exchange rate fluctuations caused an
increase in net sales of $9.3 million in the first half of 1995 as compared to
the first half of 1994.
Gross Profit. Gross profit margin decreased .5% to 30.2% in the first half of
1995 from 30.7% in the first half of 1994. The 1995 gross profit margin would
have increased by .3%, except for the effect of the valuation reserves of $1.3
million recorded in 1995 which reduced the gross margin .8%.
Selling, General and Administrative Expense. Selling, general and
administrative expense as a percentage of net sales decreased to 27.8% in the
first half of 1995 from 32.5% in the first half of 1994, reflecting the
acquisition consolidation savings actions of the Company. Dollar spending
increased in the first half of 1995 by $17.2 million from the first half of
1994, which was primarily due to the inclusion of
<PAGE>
DEA selling, general and administrative expense amounting to $13.7 million in
the first half of 1995 and the effect of translating the selling, general and
administrative expenses of the foreign operations of the Company at higher
exchange rates than the previous period. Realized and unrealized exchange gains
of $2.0 million were recognized during the first half of 1995 and losses of
$.1 million were recognized in the first half of 1994.
Operating Profit (Loss). Brown & Sharpe generated an operating profit of
$3.6 million in the first half of 1995. This compared to an operating loss of
$1.4 million in the first half of 1994. In the United States, operating loss for
the first half of 1995 totaled $1.2 million as compared to an operating profit
of $1.2 million in the first half of 1994. Foreign operations generated an
operating income of $4.8 million in the first half of 1995 as compared to an
operating loss of $2.6 million in the first half of 1994. The European
operations, in total, generated significant operating profit in the first half
of 1995, led by our Swiss operation's return to profitability. These improved
results were diminished by weaker operating results in the United States due to
a product mix that resulted in reduced margins.
Interest Expense. Interest expense totaled $3.9 million in the first half of
1995 compared to $2.7 million in the first half of 1994. This increase reflects
a $28.8 million increase in borrowings over the comparable period in 1994.
$13.8 million of the increase resulted from debt related to the DEA acquisition,
and $11.6 million resulted from additional working capital requirements,
including additional costs related to restructuring. The remainder of the
increase is due to changes in foreign exchange rates on offshore borrowings.
Net Income (Loss). As a result of the foregoing, Brown & Sharpe had a net loss
of $.4 million ($.05 per share) in the first half of 1995, compared to net loss
of $4.2 million ($.83 per share) in the first half of 1994.
Brown & Sharpe expects to report a net loss for the third quarter of 1995
primarily resulting from the effect of normally low sales volume due to the
general European practice of summer vacations, shutdowns, etc. which occur in
the third quarter.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1995, total debt increased $8.8 million to a total of $101.4 million
at June 30, 1995 as compared to $92.6 million outstanding at December 31, 1994.
Approximately $3.8 million of the debt increase is due to foreign denominated
borrowings which were translated at exchange rates that were higher than the
exchange rates in existence at the borrowing date.
Brown & Sharpe had borrowings of $26.4 million under the lines of credit
compared to total availability at that date of $60.7 million under the lines of
credit including lines of credit for DEA in an amount of $18 million. As of
June 30, 1995, there were borrowings of $11.4 million outstanding under the
Company's $25.0 million secured revolving credit facility. Notes payable and
current installments of long term debt at June 30, 1995 includes $11.6 million
of mortgage notes payable that mature in June 1996, which prior to June 1995 had
been classified as long-term debt. Management expects to refinance this debt
prior to the maturity of the notes.
Management believes that the current availability of borrowings, from short term
credit lines and term debt, together with cash flow from current levels of
operations and anticipated cost savings from the integration of DEA, Roch, and
Mauser will be sufficient to meet operational cash requirements well into 1996,
including one-time costs in integrating Roch, Mauser, and DEA, working capital
requirements and planned capital expenditures. However, failure to achieve
anticipated cost savings from the integration of DEA, Roch, and Mauser, or
unexpected delays in or costs related to the integration, could have a material
adverse effect on Brown & Sharpe's liquidity.
Cash Flow. The net loss of $.4 million in the first half of 1995, reduced by
depreciation and other non-cash items and changes in working capital, including
additional costs related to restructuring, in the
<PAGE>
second quarter of 1994 resulted in operations providing $2.9 million of cash.
In the first half of 1994, $.2 million of cash was used by operations.
In the first half of 1995, capital expenditures were $3.9 million, as compared
with depreciation and amortization of $4.1 million for the same period. Other
investment transactions in 1995 provided $.6 million. Investment transactions
in 1994 used cash of $1.6 million, of which capital expenditures amounted to
$1.4 million and depreciation and amortization amounted to $2.9 million.
Cash provided from financing transactions was $5.5 million in the first half of
1995 compared to $2.5 million provided in the 1994 period.
Working Capital. Working capital was $89.9 million at the end of the first half
of 1995 compared to $102.9 million at the end of 1994. The major reason for the
decrease in working capital in 1995 was due to the reclassification of the
mortgage notes payable discussed above from long-term debt to current
liabilities. Inventories increased to $98.9 million at June 30, 1995, an
increase of $10.3 million from the end of 1994, and accounts receivable
decreased to $101.2 million at June 30, 1995, a decrease of $7.0 million from
year end 1994. Working capital was also affected by increased borrowings on
current lines of credit.
Capital Expenditures. Brown & Sharpe's capital expenditures were approximately
$3.9 million in the first half of 1995 compared to $1.4 million in the first
half of 1994. Management estimates that annual capital expenditures of
approximately $8.0 million to $10.0 million are required to tool new products,
improve product and service quality, expand the distribution network, and
support the operations of the combined Company. Planned capital expenditures,
later in 1995, will include an additional amount of approximately $2.3 million
for the construction of a new facility in Telford, England to replace an
existing facility for which the lease expires and is non-renewable.
<PAGE>
PART II. OTHER INFORMATION
-----------------
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
------ ---------------------------------------------------
The Company's 1995 Annual Meeting of Stockholders was held on Wednesday, May 3,
1995. The stockholders voted to (1) fix the number of directors at ten and to
elect nominees to the Board of Directors to serve for the ensuing term; (2)
approve amendments to the Company's 1989 Equity Incentive Plan, (i) increasing
the number of shares for issuance and delivery in connection with awards from
500,000 shares to 875,000 shares and, (ii) limiting to 300,000 shares the number
of shares of Class A common stock that any individual could receive in any
calendar year (as set forth in the Proxy Statement); (3) ratify and approve the
appointment by the Board of Directors of Ernst & Young L.L.P. as the Company's
independent accountants for the year 1995.
The following is a summary of the results of matters submitted to security
holders:
(1) The following persons were elected to serve as directors for three year
terms expiring in 1998 and received the votes listed. There were no
abstentions or broker non-votes applicable to the election of directors:
<TABLE>
<CAPTION>
Name For Withheld
---- --- --------
Class A Common Stock
--------------------
<S> <C> <C>
Enrico Albareto 7,387,156 375,496
Henry D. Sharpe, Jr. 7,387,300 375,352
Howard K. Fuguet 7,386,376 376,276
Henry D. Sharpe, III 7,387,560 375,092
<CAPTION>
Class B Common Stock
--------------------
<S> <C> <C>
Henry D. Sharpe, Jr. 4,299,228 166,547
Howard K. Fuguet 4,299,158 166,617
Henry D. Sharpe, III 4,299,558 166,217
</TABLE>
The following directors have terms of office which continued after the
meeting: Russell A. Boss, John M. Nelson, Paul R. Tregurtha,
Vincenzo Canatelli, and Alberto de Benedictis. Subsequent to the meeting,
Frank T. Curtin was elected to complete Fred M. Stuber's term.
<TABLE>
<CAPTION>
Broker
For Against Abstain Non-Votes
--- ------- ------- ---------
<S> <C> <C> <C> <C>
(2) (i) increasing the number of
shares from 500,000 shares
to 875,000 shares 10,308,654 936,533 117,253 865,987
(ii) limiting to 300,000 Class A shares
that any one individual can
receive in one year 10,308,654 936,533 117,253 865,987
(3) appointment of Ernst & Young L.L.P.
as the Company's independent accountants 12,084,503 120,504 23,420 0
</TABLE>
<PAGE>
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
------ --------------------------------
A. See Exhibit Index annexed.
B. A report on Form 8-K was filed during the quarter ended June 30, 1995. On
April 4, 1995, Brown & Sharpe filed a Current Report under Item 4
reporting the Change in Registrants Independent Auditors.
A report on Form 10-K/A was filed during the quarter ended June 30, 1995.
On June 27, 1995, Brown & Sharpe filed an Annual Report on Form 11-K for
the Brown & Sharpe Savings and Retirement Plan for Management Employees,
and for the Brown & Sharpe Retirement Plan for the year ended December
31, 1994.
Pursuant to the requirements 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.
BROWN & SHARPE MANUFACTURING COMPANY
By: /s/ Charles A. Junkunc
---------------------------------------
Charles A. Junkunc
Vice President and Chief Financial Officer
(Principal Financial Officer)
August 9, 1995
<PAGE>
BROWN & SHARPE MANUFACTURING COMPANY
------------------------------------
EXHIBIT INDEX
-------------
4. Indenture dated as of October 1, 1980 (including form of debenture)
between the Company and Morgan Guaranty Trust Company of New York as
trustee relating to 9-1/4% convertible subordinated debentures due
December 15, 2005, originally filed as Exhibit (b) (1) to Form S-16
Registration Statement No. 2-69203 dated October 1, 1980 and incorporated
herein by reference.
The Registrant hereby agrees to furnish a copy to the Commission of other
instruments defining the rights of holders of long-term debt, as to which
the securities thereunder do not exceed ten percent of total assets on a
consolidated basis.
10.56 Amendment No. 1 dated May 31, 1995 to the Brown & Sharpe Savings and
Retirement Plan for Management Employees. (1994 Restatement)
10.57 Amendment No. 2 dated May 31, 1995 to the Brown & Sharpe Savings and
Retirement Plan for Management Employees. (1994 Restatement)
10.58 Amendment No. 1 dated May 31, 1995 to the Brown & Sharpe Savings and
Retirement Plan. (1994 Restatement)
10.59 Severance termination agreement for Fred Stuber dated May 3, 1995.
10.60 Employment Agreement with Frank T. Curtin dated May 17, 1995.
11. Computation of Per Share Data for the half-years ended June 30, 1995 and
July 2, 1994.
27. Financial Data Schedule.
<PAGE>
EXHIBIT 10.56
-------------
FIRST AMENDMENT
TO THE
BROWN & SHARPE SAVINGS AND RETIREMENT PLAN
FOR MANAGEMENT EMPLOYEES
------------------------
Pursuant to Section 12.1 of the Brown & Sharpe Savings and Retirement Plan
for Management Employees (the "Plan"), the Plan is hereby amended in the
following respects to allow for discretionary matching contributions. This
amendment is effective as of January 1, 1995.
1. All references to "Matching Contribution Account" in the Plan as in
effect prior to the amendments made by this instrument of amendment are hereby
deleted and replaced with references to "Prior Matching Contribution Account."
2. Section 2.25 is hereby renumbered as Section 2.25B and amended in its
entirety to read as follows:
"2.25B. 'Matching Contribution Account' means that portion of a
Participant's Share of the Trust Fund which is attributable to Matching
Contributions and earnings thereon."
3. A new Section 2.25A is added to the Plan, to read in its entirety as
follows:
"2.25A. 'Matching Contribution' means any contribution made to the
Trust under Section 5.1A."
4. A new Section 2.33A is added to the Plan, to read in its entirety as
follows:
"2.33A. 'Prior Matching Contribution Account' means that portion, if
any, of a Participant's Share of the Trust Fund which is attributable to
Participating Employer matching contributions under the Plan as in effect
prior to January 1, 1987, and the earnings thereon."
5. Section 5.1A is added to the Plan as follows:
"Section 5.1A. Matching Contributions. For each Plan Year commencing
----------------------
on or after January 1, 1995, the Participating Employers will contribute
to the Trust for the benefit of eligible Participants such Matching
Contributions, if any, as are determined pursuant to this Section. For
each such Plan Year, the Board of Directors shall determine the aggregate
net after-tax income for the Year of the Company and all Affiliated
Companies, based on such accounting procedures and adjustments as the Board
of Directors may reasonably determine but without taking into account Plan
contributions under this Section. The aggregate net after-tax income
amount so determined shall then be reduced by an amount equal to 25% of
the aggregate Elective Contributions made for the Plan Year for the benefit
of eligible Participants (for this purpose disregarding Elective
Contributions for the benefit of any eligible Participant for any Plan Year
in excess of 6% of such eligible Participant's Salary for such Plan Year).
If the resulting balance is a positive number, the Board of Directors may,
but need not, determine that a Matching Contribution will be made for the
Plan Year. If the Board of Directors determines that a Matching
Contribution is to be made for the Plan Year, each Participating Employer
shall contribute, for the benefit of each of its eligible Participants (as
determined by the Committee), a Matching Contribution equal to a percentage
(not to exceed 25%), as set by the Board of Directors, of the Elective
Contributions made for
<PAGE>
the benefit of such eligible Participant for such Year, disregarding
any Elective Contributions for any Plan Year in excess of 6% of such
eligible Participant's Salary for such Plan Year.
For purposes of this Section 5.1A, a Participant shall be considered
an 'eligible Participant' for any Plan Year if he or she is an Eligible
Employee on the last day of the Plan Year or, while an Eligible Employee,
separated from service on account of Retirement, death, or Total and
Permanent Disability during such Plan Year."
6. Section 5.2 is amended by inserting the phrase "and Section 5.1A" after
the phrase "Section 5.1."
7. Section 5.4 is amended by inserting the following paragraph to the end
thereof:
"Elective Contributions for the benefit of a Participant which are
returned as a result of this Section shall not be taken into account in
determining the amount of Matching Contributions to be made for the
Participant's benefit. To the extent Matching Contributions have already
been made with respect to the Elective Contributions at the time the
Elective Contributions are determined to be excess contributions, such
Matching Contributions shall be distributed to the Participant at the same
time the Elective Contributions are returned."
8. Section 5.4A is added to the Plan as follows:
"5.4A. Certain limitations and adjustments pertaining to Matching
----------------------------------------------------------
Contributions.
-------------
(a) In general. Matching Contributions made under the Plan
----------
are subject to the limits of Code section 401(m), as more fully
described below. The Plan provisions relating to the 401(m) limits are
to be interpreted and applied in accordance with Code sections 401(m)
and 401(a)(4), which are hereby incorporated by reference, and in such
manner as to satisfy such other requirements relating to Code section
401(m) as may be prescribed by the Secretary of the Treasury from time
to time.
(b) Limits. In addition to the limitations of Section 5.5,
------
Matching Contributions for any Plan Year shall be limited so that the
nondiscrimination standard described in this subsection is satisfied.
The nondiscrimination standard described in this subsection is
satisfied if and only if
(i) either (A) the average of the ratios of all
Matching Contributions to Salary (the "contribution ratios") for
all highly compensated Participants does not exceed 1.25% times
the average of the contribution ratios for all Participants other
than highly compensated Participants, or (B) the excess of the
average of the contribution ratios for all highly compensated
Participants over that for all other Participants is not more
than two percentage points, and the average of the contribution
ratios for all highly compensated Participants does not exceed
the product of 2 times the average of the contribution ratios for
all Participants other than highly compensated Participants; and
---
(ii) after taking into account Elective Contributions
made for the benefit of highly compensated Participants, the
so-called "multiple use" limitations of Treasury Regulations
(S)1.401(m)-2 have not been exceeded.
For purposes of these determinations, "highly compensated
Participants" has the same meaning as in Section 5.3. Elective
Contributions not applied to satisfy the Code section 401(k)(3) limits
described in Section 5.3 above may be treated as Matching
<PAGE>
Contributions for purposes of the limitations described in this
Section to the extent permitted by Regulation Section
1.401(m)-1(b)(5). In the event that the Plan satisfies the
requirements of Code sections 401(k), 410(a)(4), or 410(b) only if
aggregated with one or more other plans with the same plan year, or if
one or more other plans with the same plan year satisfy such Code
sections only if aggregated with this Plan, then this Section shall be
applied by determining the ratios of Matching Contributions to Salary
as if all such plans were a single plan.
(c) Adjustments. Notwithstanding Section 5.1A above, if the
-----------
amount determined to be contributed to the Trust for any Plan Year as
Matching Contributions would result in a failure to satisfy the
limitations of (b) above, then the Matching Contributions to be
contributed to the Trust for the benefit of highly compensated
Participants shall be reduced in such manner and to such extent as the
Committee determines to be necessary to satisfy such limitations. If,
notwithstanding such precautions, Matching Contributions made to the
Trust for a Plan Year are later determined to exceed the limitations
of (b) above, then before the end of the Plan Year following the Plan
Year for which the Matching Contributions were made the Committee
shall cause to be distributed the excess of the aggregate amount of
the Matching Contributions (and any Elective Contribution taken into
account in computing the actual contribution percentages) actually
made on behalf of highly compensated employees for the Plan Year over
the maximum amount of such contributions permitted under (b) above.
In doing so, the Committee shall incrementally decrease, to the extent
necessary, the contribution ratios of highly compensated Participants
starting with the highest such ratio. The aggregate amount of such
decreases will be designated by the Committee as a distribution of
excess aggregate contributions and will be distributed to the affected
Participants together with any allocable income determined in
accordance with applicable Treasury Regulations. For purposes of
distributing any excess Matching Contribution under this subsection,
the determination and distribution of the excess with respect to a
highly compensated Participant whose contribution ratio is determined
after application of family aggregation rules will be accomplished by
allocating the excess among family members in proportion to the
Matching Contributions of each family member who is combined to
determine the contribution ratio. Any excess Matching Contributions
distributed in accordance with this subsection shall nevertheless be
treated as employer contributions for purposes of Code sections
401(a)(4), 404, and 415."
9. Section 5.5 is amended by deleting the phrase "Section 5.1 and Section
5.2" and inserting therefor the phrase "Sections 5.1, 5.1A and 5.2".
10. Section 6.1 is amended by inserting after "Participating Employer
Contribution Account" the following phrase ", a Matching Contribution Account".
11. Section 6.2, paragraph (d) is amended by inserting to the end thereof
the following:
"and credit the Participant's Matching Contribution Account with the
contribution (if any) made in respect of such Participant for such Plan
Year under Section 5.1A."
12. Section 6.3 is amended in its entirety to read as follows:
"6.3. Treatment of forfeitures. If a Participant forfeits any
------------------------
interest in the Trust Fund as provided under Section 10.5 below, the amount
of the forfeiture will be applied toward Matching Contributions under
Section 5.1A (if any) for the Plan Year, with any excess applied toward
Participating Employer Contributions for such Year, if any. If any excess
remains after application of the preceding sentence, the excess shall be
applied first toward the correction of
<PAGE>
any errors in allocation, the determination of benefit amounts or the
execution of benefit payments, and then toward the payment of Plan expenses
in accordance with Section 3.9. If any excess still remains after
application of the preceding sentences, it shall be allocated in the same
manner as Participating Employer Contributions."
13. Section 6.4, paragraph (d) is amended in its entirety to read as
follows:
"(d) Correction of excess Annual Addition. The Committee, to the
------------------------------------
extent necessary to satisfy the foregoing limitations in the case of any
Participant, shall: (i) first, reduce any future contributions remaining
to be made for the Limitation Year for the benefit of the Participant;
(ii) second, if a reduction is necessary in respect of amounts already
contributed, return to the affected Participant his or her Elective
Contributions while transferring any related Matching Contributions (and
earnings) to a suspense account within the Plan, to be applied or allocated
as hereinafter provided; and (iii) if a further reduction is necessary,
transfer any Participating Employer Contributions (and earnings) for the
benefit of the Participant to a suspense account within the Plan, to be
applied or allocated as hereinafter provided. Amounts held in a suspense
account pursuant to the preceding sentence shall be used to reduce Matching
Contributions for the benefit of the affected Participant for the next
Limitation Year (and succeeding Limitation Years, if any), if the
Participant is an Eligible Employee as of the end of such Limitation Year.
If the Participant is not an Eligible Employee as of the end of any such
Limitation Year, any amount remaining in such suspense account shall be
applied toward Matching Contributions for remaining Participants. If for
any Plan Year a Participating Employer Contribution but no Matching
Contribution is made to the Trust, any amounts that would have been applied
under this Section to Matching Contributions shall instead be applied to
reduce Participating Employer Contributions."
14. Section 7.6 is amended by inserting the phrase "or Matching" after the
phrase "(but not Participating Employer" in the first sentence thereof.
15. Section 10.1 is amended by inserting after the phrase "Participating
Employer Contribution Account" the phrase "and Matching Contribution Account".
16. Section 10.2 is amended by inserting after the phrase "Participating
Employer Contribution Account" the phrase "and Matching Contribution Account".
17. Section 10.5 is deleted in its entirety and is replaced with the
following:
"10.5. Forfeitures. If a Participant separates from the service of
-----------
the Employer at a time when he or she has a less than one hundred percent
(100%) nonforfeitable interest in his or her Participating Employer and
Matching Contribution Accounts, the forfeitable portion of such Accounts
will immediately be treated as forfeited. Notwithstanding the foregoing,
if at any time prior to incurring five consecutive Breaks in Service the
Participant is reemployed by the Employer, any amount so forfeited will be
recredited to the Participant's Participating Employer and Matching
Contribution Accounts, as appropriate, subject to the following special
rules:
(a) Amounts required to be recredited to a Participant's
Participating Employer and Matching Contribution Accounts pursuant to
this Section will be taken first from amounts forfeited by other
Participants which have not yet been applied in accordance with
Section 6.3.
(b) A reemployed Participant's nonforfeitable interest in any
amounts recredited to his or her Participating Employer and Matching
Contribution Accounts pursuant to this Section will be determined
under Section 10.2, taking into account the Participant's Years of
Service for Vesting accumulated before the separation from service
which caused the forfeiture.
<PAGE>
All forfeitures under this Section 10.5, to the extent not applied to the
recrediting of Participating Employer and Matching Contribution Accounts of
reemployed Participants as described above, will be applied in accordance
with Section 6.3."
18. Section 14.1 is amended by deleting the phrase "the sum of the
Elective and Participating Employer Contributions" wherever it appears and
replacing that phrase with the following phrase "the sum of the Elective,
Matching and Participating Employer Contributions."
IN WITNESS WHEREOF, Brown & Sharpe Manufacturing Company. has caused this
amendment to be signed by its duly authorized officer this 31st day of May,
1995.
BROWN & SHARPE MANUFACTURING
COMPANY
By: /s/ Charles A. Junkunc
----------------------
<PAGE>
EXHIBIT 10.57
-------------
THE BROWN & SHARPE SAVINGS AND RETIREMENT PLAN
FOR MANAGEMENT EMPLOYEES
(1994 Restatement)
Amendment Two
-------------
Pursuant to Section 12.1 of the Brown & Sharpe Savings and Retirement Plan
for Management Employees (the "Plan"), the Plan is hereby amended in the
following respects to credit service performed for Digital Electronic Automation
Company as service under the Plan for purposes of participation and vesting.
1. Section 2.46 is amended by adding to the end thereof the following
sentence:
"For purposes of this Section 2.46, service performed for Digital
Electronic Automation Company shall be credited as service for the
Employer, provided, however, that no individual shall participate in
the Plan before April 1, 1995, solely on account of the application of
this sentence."
2. Section 2.47 is amended by adding to the end thereof the following
sentence:
"For purposes of this Section 2.47, service performed for Digital
Electronic Automation Company shall be credited as service for the
Employer."
IN WITNESS WHEREOF, Brown & Sharpe Manufacturing Company has caused
this instrument to be signed by its duly authorized officer this 31st day of
May, 1995.
BROWN & SHARPE MANUFACTURING COMPANY
By: /s/ Charles A. Junkunc
----------------------
<PAGE>
EXHIBIT 10.58
-------------
FIRST AMENDMENT
TO THE
BROWN & SHARPE SAVINGS AND RETIREMENT PLAN
------------------------------------------
Pursuant to Section 12.1 of the Brown & Sharpe Savings and Retirement Plan
(the "Plan"), the Plan is hereby amended in the following respects to allow for
discretionary matching contributions. This amendment is effective as of January
1, 1995.
1. A new Section 2.24A is added to the Plan, to read in its entirety as
follows:
"2.24A. 'Matching Contribution' means any contribution made to the
Trust under Section 5.1A."
2. A new Section 2.24B is added to the Plan, to read in its entirety as
follows:
"2.24B. 'Matching Contribution Account' means that portion of a
Participant's Share of the Trust Fund which is attributable to Matching
Contributions and earnings thereon."
3. Section 5.1A is added to the Plan as follows:
"Section 5.1A. Matching Contributions. For each Plan Year commencing
----------------------
on or after January 1, 1995, the Participating Employers will contribute to
the Trust for the benefit of eligible Participants such Matching
Contributions, if any, as are determined pursuant to this Section. For
each such Plan Year, the Board of Directors shall determine the aggregate
net after-tax income for the Year of the Company and all Affiliated
Companies, based on such accounting procedures and adjustments as the Board
of Directors may reasonably determine but without taking into account Plan
contributions under this Section. The aggregate net after-tax income
amount so determined shall then be reduced by an amount equal to 25% of the
aggregate Elective Contributions made for the Plan Year for the benefit of
eligible Participants (for this purpose disregarding Elective Contributions
for the benefit of any eligible Participant for any Plan Year in excess of
6% of such eligible Participant's Salary for such Plan Year). If the
resulting balance is a positive number, the Board of Directors may, but
need not, determine that a Matching Contribution will be made for the Plan
Year. If the Board of Directors determines that a Matching Contribution is
to be made for the Plan Year, each Participating Employer shall
contribute, for the benefit of each of its eligible Participants (as
determined by the Committee), a Matching Contribution equal to a percentage
(not to exceed 25%), as set by the Board of Directors, of the Elective
Contributions made for the benefit of such eligible Participant for such
Year, disregarding any Elective Contributions for any Plan Year in excess
of 6% of such eligible Participant's Salary for such Plan Year.
For purposes of this Section 5.1A, a Participant shall be considered
an 'eligible Participant' for any Plan Year if he or she is an Eligible
Employee on the last day of the Plan Year or, while an Eligible Employee,
separated from service on account of Retirement, death, or Total and
Permanent Disability during such Plan Year."
4. Section 5.2 is amended by inserting the phrase "and Section 5.1A" after
the phrase "Section 5.1."
<PAGE>
5. Section 5.4 is amended by inserting the following paragraph to the end
thereof:
"Elective Contributions for the benefit of a Participant which are
returned as a result of this Section shall not be taken into account in
determining the amount of Matching Contributions to be made for the
Participant's benefit. To the extent Matching Contributions have already
been made with respect to the Elective Contributions at the time the
Elective Contributions are determined to be excess contributions, such
Matching Contributions shall be distributed to the Participant at the same
time the Elective Contributions are returned."
6. Section 5.4A is added to the Plan as follows:
"5.4A. Certain limitations and adjustments pertaining to Matching
----------------------------------------------------------
Contributions.
-------------
(a) In general. Matching Contributions made under the Plan
----------
are subject to the limits of Code section 401(m), as more fully
described below. The Plan provisions relating to the 401(m) limits are
to be interpreted and applied in accordance with Code sections 401(m)
and 401(a)(4), which are hereby incorporated by reference, and in such
manner as to satisfy such other requirements relating to Code section
401(m) as may be prescribed by the Secretary of the Treasury from time
to time.
(b) Limits. In addition to the limitations of Section 5.5,
------
Matching Contributions for any Plan Year shall be limited so that the
nondiscrimination standard described in this subsection is satisfied.
The nondiscrimination standard described in this subsection is
satisfied if and only if
(i) either (A) the average of the ratios of all
Matching Contributions to Salary (the "contribution ratios")
for all highly compensated Participants does not exceed 1.25%
times the average of the contribution ratios for all
Participants other than highly compensated Participants, or
(B) the excess of the average of the contribution ratios for
all highly compensated Participants over that for all other
Participants is not more than two percentage points, and the
average of the contribution ratios for all highly compensated
Participants does not exceed the product of 2 times the
average of the contribution ratios for all Participants other
than highly compensated Participants; and
---
(ii) after taking into account Elective Contributions
made for the benefit of highly compensated Participants, the
so-called "multiple use" limitations of Treasury Regulations
(S) 1.401(m)-2 have not been exceeded.
For purposes of these determinations, "highly compensated
Participants" has the same meaning as in Section 5.3. Elective
Contributions not applied to satisfy the Code section 401(k)(3) limits
described in Section 5.3 above may be treated as Matching
Contributions for purposes of the limitations described in this
Section to the extent permitted by Regulation Section
1.401(m)-1(b)(5). In the event that the Plan satisfies the
requirements of Code sections 401(k), 410(a)(4), or 410(b) only if
aggregated with one or more other plans with the same plan year, or if
one or more other plans with the same plan year satisfy such Code
sections only if aggregated with this Plan, then this Section shall be
applied by determining the ratios of Matching Contributions to Salary
as if all such plans were a single plan.
(c) Adjustments. Notwithstanding Section 5.1A above, if the
-----------
amount determined to be contributed to the Trust for any Plan Year as
Matching Contributions would result in a failure to satisfy the
limitations of (b) above, then the Matching Contributions to be
contributed to the Trust for the benefit of highly
<PAGE>
compensated Participants shall be reduced in such manner and to such
extent as the Committee determines to be necessary to satisfy such
limitations. If, notwithstanding such precautions, Matching
Contributions made to the Trust for a Plan Year are later determined
to exceed the limitations of (b) above, then before the end of the
Plan Year following the Plan Year for which the Matching Contributions
were made the Committee shall cause to be distributed the excess of
the aggregate amount of the Matching Contributions (and any Elective
Contribution taken into account in computing the actual contribution
percentages) actually made on behalf of highly compensated employees
for the Plan Year over the maximum amount of such contributions
permitted under (b) above. In doing so, the Committee shall
incrementally decrease, to the extent necessary, the contribution
ratios of highly compensated Participants starting with the highest
such ratio. The aggregate amount of such decreases will be designated
by the Committee as a distribution of excess aggregate contributions
and will be distributed to the affected Participants together with any
allocable income determined in accordance with applicable Treasury
Regulations. For purposes of distributing any excess Matching
Contribution under this subsection, the determination and distribution
of the excess with respect to a highly compensated Participant whose
contribution ratio is determined after application of family
aggregation rules will be accomplished by allocating the excess among
family members in proportion to the Matching Contributions of each
family member who is combined to determine the contribution ratio. Any
excess Matching Contributions distributed in accordance with this
subsection shall nevertheless be treated as employer contributions for
purposes of Code sections 401(a)(4), 404, and 415."
7. Section 5.5 is amended by deleting the phrase "Section 5.1 and
Section 5.2" and inserting therefor the phrase "Sections 5.1, 5.1A and 5.2".
8. Section 6.1 is amended by inserting after "Participating Employer
Contribution Account" the following phrase ", a Matching Contribution Account".
9. Section 6.2, paragraph (d) is amended by inserting to the end thereof
the following:
"and credit the Participant's Matching Contribution Account with the
contribution (if any) made in respect of such Participant for such Plan
Year under Section 5.1A."
10. Section 6.3 is amended in its entirety to read as follows:
"6.3. Treatment of forfeitures. If a Participant forfeits any
------------------------
interest in the Trust Fund as provided under Section 10.5 below, the amount
of the forfeiture will be applied toward Matching Contributions under
Section 5.1A (if any) for the Plan Year, with any excess applied toward
Participating Employer Contributions for such Year, if any. If any excess
remains after application of the preceding sentence, the excess shall be
applied first toward the correction of any errors in allocation, the
determination of benefit amounts or the execution of benefit payments, and
then toward the payment of Plan expenses in accordance with Section 3.9.
If any excess still remains after application of the preceding sentences,
it shall be allocated in the same manner as Participating Employer
Contributions."
11. Section 6.4, paragraph (d) is amended in its entirety to read as
follows:
"(d) Correction of excess Annual Addition. The Committee, to the
------------------------------------
extent necessary to satisfy the foregoing limitations in the case of any
Participant, shall: (i) first, reduce any future contributions remaining
to be made for the Limitation Year for the benefit of the Participant;
(ii) second, if a reduction is necessary in respect of amounts already
contributed, return to the affected Participant his or her Elective
Contributions while transferring any related
<PAGE>
Matching Contributions (and earnings) to a suspense account within the
Plan, to be applied or allocated as hereinafter provided; and (iii) if a
further reduction is necessary, transfer any Participating Employer
Contributions (and earnings) for the benefit of the Participant to a
suspense account within the Plan, to be applied or allocated as hereinafter
provided. Amounts held in a suspense account pursuant to the preceding
sentence shall be used to reduce Matching Contributions for the benefit of
the affected Participant for the next Limitation Year (and succeeding
Limitation Years, if any), if the Participant is an Eligible Employee as of
the end of such Limitation Year. If the Participant is not an Eligible
Employee as of the end of any such Limitation Year, any amount remaining in
such suspense account shall be applied toward Matching Contributions for
remaining Participants. If for any Plan Year a Participating Employer
Contribution but no Matching Contribution is made to the Trust, any amounts
that would have been applied under this Section to Matching Contributions
shall instead be applied to reduce Participating Employer Contributions."
12. Section 7.6 is amended by inserting the phrase "or Matching" after the
phrase "(but not Participating Employer" in the first sentence thereof.
13. Section 10.1 is amended by inserting after the phrase "Participating
Employer Contribution Account" the phrase "and Matching Contribution Account".
14. Section 10.2 is amended by inserting after the phrase "Participating
Employer Contribution Account" the phrase "and Matching Contribution Account".
15. Section 10.5 is deleted in its entirety and is replaced with the
following:
"10.5. Forfeitures. If a Participant separates from the service of
-----------
the Employer at a time when he or she has a less than one hundred percent
(100%) nonforfeitable interest in his or her Participating Employer and
Matching Contribution Accounts, the forfeitable portion of such Accounts
will immediately be treated as forfeited. Notwithstanding the foregoing,
if at any time prior to incurring five consecutive Breaks in Service the
Participant is reemployed by the Employer, any amount so forfeited will be
recredited to the Participant's Participating Employer and Matching
Contribution Accounts, as appropriate, subject to the following special
rules:
(a) Amounts required to be recredited to a Participant's
Participating Employer and Matching Contribution Accounts pursuant to
this Section will be taken first from amounts forfeited by other
Participants which have not yet been applied in accordance with
Section 6.3.
(b) A reemployed Participant's nonforfeitable interest in
any amounts recredited to his or her Participating Employer and
Matching Contribution Accounts pursuant to this Section will be
determined under Section 10.2, taking into account the Participant's
Years of Service for Vesting accumulated before the separation from
service which caused the forfeiture.
All forfeitures under this Section 10.5, to the extent not applied to the
recrediting of Participating Employer and Matching Contribution Accounts of
reemployed Participants as described above, will be applied in accordance
with Section 6.3."
<PAGE>
16. Section 14.1 is amended by deleting the phrase "the sum of the
Elective and Participating Employer Contributions" wherever it appears and
replacing that phrase with the following phrase "the sum of the Elective,
Matching and Participating Employer Contributions."
IN WITNESS WHEREOF, Brown & Sharpe Manufacturing Company. has caused
this amendment to be signed by its duly authorized officer this 31st day of
May, 1995.
BROWN & SHARPE MANUFACTURING
COMPANY
By: /s/ Charles A. Junkunc
----------------------
<PAGE>
EXHIBIT 10.59
-------------
Draft of
5/17/95
SEVERANCE AGREEMENT
Severance Agreement dated as of May 3, 1995 between Brown & Sharpe
Manufacturing Company, headquartered at 200 Frenchtown Road, North Kingstown,
RI 02852 (the "Company") and Fred M. Stuber, residing at Chemin des Salines,
CH-1132 Lully s/Morges, Switzerland ("Stuber").
WHEREAS, Stuber announced in February, 1995 his intention to resign as an
employee, President and CEO of the Company, subject to staying on until the
Board of Directors has selected a new President and CEO; and
WHEREAS, the Company wishes to confirm its understandings with Stuber with
respect to a payment of capital and all other matters in accordance with the
terms specified below.
NOW THEREFORE, in consideration of the mutual promises set forth below and
these premises, the Company and Stuber hereby agree as follows:
Section 1. Resignation.
Stuber hereby confirms his decision to resign as an employee of the Company
effective May 31, 1995, at which time all salary payments and other compensation
of any kind whatsoever from the Company and from any subsidiary, affiliate or
joint venture of the Company shall cease, except as otherwise expressly provided
herein. Stuber has delivered to the Secretary of the Company his resignations
(and the resignations have been accepted) effective May 3, 1995 as an officer
and director of the Company, each subsidiary of the Company and each joint
venture of the Company in which he is an officer or director, and his
resignations as a trustee or other fiduciary of any employee benefit plan for
any of such entities. Execution of this Agreement by Mr. Stuber shall
constitute his resignation as an employee of the Company and any subsidiary or
affiliate effective May 31, 1995.
Section 2. Capital Payment; Other Benefits.
2.1 Payment of Capital. In accordance with the terms and subject to the
------------------
conditions contained in this Agreement, the Company agrees to make a payment of
capital (severance and forbearance of competition) to Stuber in recognition of
his past contributions and services to the Company as an employee, President and
Chief Executive Officer and in consideration of Stuber entering into the
non-competition provisions of this Agreement. The amount of the payment of
capital is 681,211 Swiss Francs, consisting of (i) a lump sum payment in cash in
the amount of 340,605.50 Swiss Francs on May 31, 1995, which shall be for the
non-competition provisions, and (ii) a monthly amount payable on the first day
of each month in cash equal to 48,657.93 Swiss Francs per month for seven
months, commencing with the month of June, 1995 and ending with the month of
December, 1995, which shall be for the severance provisions. Payments shall be
made in Switzerland.
2.2 Benefits.
--------
2.2.1 All outstanding stock options previously granted to Stuber may be
exercised by Stuber at any time prior to the earlier of (i) their stated
expiration date or (ii) three months from May 31, 1995 (the effective date of
termination of his employment), as provided in the relevant stock option plan.
2.2.2 16,100 shares of Class A Common Stock held by Stuber subject to
forfeiture restrictions which have not lapsed are hereby forfeited and the stock
certificates therefor shall be transferred back to the Company, by assignment by
Stuber on or promptly after the date hereof for no payment.
<PAGE>
2.2.3 Any business expenses of Stuber which are reimbursable by the
Company shall be reimbursed by the Company upon submission by Stuber within 30
days of the date hereof of proper documentation in accordance with Company
policy (or 30 days after May 31, 1995 in respect of expenses incurred between
the date hereof and May 31,1995).
2.2.4 Stuber is a participant in two retirement plans of Tesa SA under
which he will receive benefits in accordance with the provisions of those Plans.
Stuber confirms that he is not entitled to any other payments from Tesa SA or
under Swiss law in connection with his termination of employment.
Section 3. Survival of Severance Benefits.
In the event Stuber dies, his beneficiary (as designated to the Company in
writing) or, if none, his estate, will be entitled to receive all unpaid
severance compensation amounts and benefits due under the terms of this
Agreement.
Section 4. [Intentionally Left Blank].
Section 5. Termination of Employment Status.
Stuber acknowledges and agrees with the Company that the monetary
arrangements provided for in this Agreement are granted by the Company
voluntarily and that in no event are the benefits granted under this Agreement
intended or shall be construed to create, imply or constitute salary or the
continuation or existence of any employment relationship with the Company
subsequent to the May 31, 1995 effective date of Stuber's termination of
employment.
Section 6. Competitive Activity, Confidential Information.
6.1 Prior to two years from the effective date of termination of Stuber's
employment, and in consideration of the payments to Stuber under Section 2.1,
Stuber shall not, provided the Company is not in material default of its
obligations to Stuber under this Agreement (or has cured such default within 30
days after written notice to the Company), without obtaining the prior written
consent of the Company, engage in any competitive activity in the United States
and any other country in which the Company (or its subsidiaries or joint
ventures) was making sales either on the date hereof or in the later year within
said two year period or in which the Company (or its subsidiaries or joint
ventures) was proposing to enter directly or through a joint venture or
otherwise. For purposes of this Agreement, the term "competitive activity"
shall mean Stuber's employment by, consulting for or other participation in,
directly or indirectly, through a consulting company or otherwise, any business
enterprise engaged in competition with any business of the Company and its
subsidiaries or joint venture affiliates. "Competitive activity" shall not
include the ownership of securities in any such enterprise and exercise of
rights appurtenant thereto not involving any management influence or
participation in management by Stuber.
6.2 Except as authorized in writing by the President of the Company,
Stuber agrees to keep confidential and not use or disclose all confidential
matters of the Company (and its subsidiaries and joint ventures in which the
Company participates), including without limitation "know how", trade secrets,
customer lists, pricing information, details of material contracts, operational
methods, marketing plans or strategies, and all other business information,
knowledge or data of a like nature, and including the terms of this Agreement,
except to the extent such information, knowledge or data has become or becomes
available to the general public (except from a party who unlawfully acquired
such information, knowledge, or data). Stuber agrees to return all copies of any
materials or other property of the Company under his control and to vacate his
offices and the premises of the Company and its subsidiaries effective May 31,
1995. Stuber agrees not to do anything that could reasonably be expected to
injure the Company's reputation with its customers, suppliers, or other entities
or persons with whom it has relationships.
6.3 The parties agree that a breach by Stuber of Sections 6.1 or 6.2 of
this Agreement will cause irreparable harm to the Company and that payment of
monies will not remedy such breach and that
<PAGE>
accordingly, such Sections may be specifically enforced against Stuber, in
addition to any other rights or remedies available to the Company on account of
any such breach. Without limiting the foregoing, it is understood that the
Company shall not be obligated to continue to make the payments specified in
Section 2.1 in the event of a material breach by Stuber of Sections 6.1 or 6.2,
which breach continues without having been cured within 30 days written notice
to Stuber specifying the breach in reasonable detail.
It is also understood that if in any judicial proceeding in any
jurisdiction a court of competent jurisdiction shall determine that the
provisions of Sections 6.1 or 6.2 are unenforceable because they cover too
extensive a geographical area or business scope or for any other reason, then
the parties intend that such provisions shall be deemed to be limited in such
manner as will be deemed enforceable by such court.
Section 7. Consulting.
Stuber agrees, in consideration of the payments in Section 2.1, to be
available, commencing June 1, 1995, for consultation as an independent
contractor to the Company within Switzerland (or such other place as is mutually
agreed) to the President during the transition period for the new President and
CEO of the Company upon request of the President, at times to be mutually
agreed, but in any event not more than four work days in the aggregate prior to
December 31, 1995.
Section 8. Release.
Stuber agrees to deliver to the Company an executed release of all claims
that he may have against the Company, any of its subsidiaries or affiliates and
any of their respective directors, officers and employees, in the form attached
as Exhibit A.
Section 9. Withholding.
All payments required to be made by the Company hereunder to Stuber or his
dependents, beneficiaries or estate will be subject to the withholding of such
amounts relating to tax and/or other payroll deductions as may be required by
law.
Section 10. Amendment.
No amendment, change or modification of this Agreement may be made except
in writing, signed by both parties.
Section 11. Miscellaneous.
11.1 The provisions of this Agreement shall be binding upon and shall
inure to the benefit of Stuber, his heirs, executors, administrators, legal
representatives and the Company and its successors and assigns.
11.2 The validity, interpretation and enforcement of this Agreement shall
be governed by the laws of the State of Rhode Island. The invalidity or
unenforceability of any provision of this Agreement shall not affect the
validity of any other provision. Each of the Company and Stuber (i) irrevocably
submits to the jurisdiction of the United States District Court for the District
of Rhode Island and to the jurisdiction of the state courts of the State of
Rhode Island for the purpose of any suit or other proceeding arising out of or
based upon this Agreement, the subject matters hereof or any former relationship
between the parties, (ii) agrees that any claim or suit based on this Agreement
or relating to any of the foregoing will be brought only in said federal or
state courts in the State of Rhode Island and (iii) waives, to the extent not
prohibited by applicable law, and agrees not to assert in any such proceeding,
any claim that it or he is not subject personally to the jurisdiction of the
above-named courts, that he or it is immune from extraterritorial injunctive
relief or other injunctive relief, that his or its property is exempt or immune
from attachment or execution, that any such proceeding brought or maintained in
such court should be
<PAGE>
transferred to some other court or should be stayed or dismissed by reason of
the pendency of some other proceeding in some other court, or that this
Agreement or the subject matter hereof may not be enforced in or by such court.
11.3 No right to or interest in any payments provided herein shall be
assignable by Stuber; provided, however, that this provision shall not preclude
-------- -------
him from designating one or more beneficiaries to receive any amount that may be
payable after his death and shall not preclude the legal representative of his
estate from assigning any right hereunder to the person or persons entitled
thereto under his will or, in the case of intestacy, to the person or persons
entitled thereto under the laws of intestacy applicable to his estate. The term
"beneficiaries" as used in this Agreement shall mean a beneficiary or
beneficiaries so designated to receive any such amount, or if no beneficiary has
been so designated, the legal representative of Stuber's estate.
11.4 Notices. All notices under this Agreement shall be in writing and
-------
shall be deemed given if delivered in person or by confirmed telecopy or three
business days after being deposited in the U.S. mail, postage pre-paid,
registered or certified mail, addressed as follows:
If to the Company, to:
Brown & Sharpe Manufacturing Company
200 Frenchtown Road
North Kingstown, RI 02852
Attention: President
With a copy to:
Ropes & Gray
One International Place
Boston, MA 02110
Attention: Howard K. Fuguet, Esq.
If to Stuber, to
Chemin des Salines
CH-1132 Lully s/Morges
SWITZERLAND
11.5 This Agreement, together with the employee benefit plans in which
Stuber is a participant, as listed in Section 2, constitutes the entire
agreement between the parties (and any subsidiaries or joint ventures of the
Company) with respect to the resignation of Stuber and any severance,
compensation, pension or other benefit arrangements continuing after his
termination of employment and supercedes any other oral or written agreements or
understandings with respect thereto (including without limitation any agreement
between Stuber and Tesa SA dated November 10, 1988 and any agreement between the
Company and Stuber dated September 18, 1990).
11.6 The Company hereby guarantees, warrants and covenants that the
provisions of Section 10 and Section 11 of the By-laws shall remain applicable
to claims against Stuber, relating to action or non-action prior to his
resignation as a director and officer of the Corporation (and any subsidiary or
affiliate), notwithstanding any repeal or modification of said By-law.
In addition, the Company agrees that it will, for the next five years,
include Stuber (to the same extent as if he were still a director and officer),
as an insured under the Company's D&O Insurance Policy (presently with Chubb
Insurance Company) with respect to claims later made with respect to actions or
non-actions occurring prior to Stuber's resignation as such director and
officer.
<PAGE>
Section 12. Review of Agreement.
In signing this Agreement, Stuber acknowledges that he understands its
provisions, that his agreement is knowing and voluntary and that he has been
afforded a full and reasonable opportunity of at least 21 days to consider its
terms and consult with or seek advice from an attorney or any other person of
his choice, and that he has been advised by the Company to consult with an
attorney prior to executing this Agreement. Stuber may revoke this Agreement at
any time during the seven day period immediately following the date of Stuber's
execution and delivery of this Agreement. If this Agreement is not revoked by
Stuber by written notification to the Company at the address set forth above
prior to the expiration of said seven-day period, this Agreement shall take
effect as a legally binding agreement between Stuber and the Company on the
basis set forth above.
IN WITNESS WHEREOF, the Company and Stuber have each caused this Agreement
to be duly executed and delivered as of the date set forth above.
BROWN & SHARPE MANUFACTURING
COMPANY
By: /s/ Frank T. Curtin
-------------------
/s/ Fred M. Stuber 5/23/95
------------------------
Fred M. Stuber
<PAGE>
EXHIBIT 10.60
-------------
EMPLOYMENT AGREEMENT
AGREEMENT by and between Brown Sharpe Manufacturing Company ("Company"), a
Delaware corporation with its principal place of business at 200 Frenchtown
Road, North Kingstown, RI 02852, and Frank T. Curtin of One Underdown Road, Ann
Arbor, Michigan 48105 (the "Executive"), effective as of May 2, 1995.
WHEREAS, the operations of the Company require new leadership by an
individual qualified for this task;
WHEREAS, the Executive is possessed of certain experience and expertise
that qualify him to provide the direction and leadership required by the
Company; and
WHEREAS, subject to the terms and conditions hereinafter set forth, the
Company wishes to employ the Executive as its President and Chief Executive
Officer and the Executive wishes to accept such employment;
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
promises, terms, provisions and conditions set forth in this Agreement, the
parties hereby agree:
1. Employment. Subject to the terms and conditions set forth in this
----------
Agreement, the Company hereby offers and the Executive hereby accepts
employment.
2. Term. Subject to earlier termination as hereafter provided, the
----
Executive's employment hereunder shall be for a term of three (3) years,
commencing on the effective date hereof, and may be extended or renewed only by
a written agreement signed by the Executive and an officer of the Company
expressly authorized by the Company's Board of Directors. The term of this
Agreement, as from time to time extended or renewed, is hereafter referred to as
"the term of this Agreement" or "the term hereof".
3. Capacity and Performance.
------------------------
a. During the term hereof, the Executive shall serve the Company as its
President and Chief Executive Officer.
b. During the term hereof, the Executive shall be employed by the Company
on a full-time basis and shall have the leadership of and be responsible to the
Board of Directors for all operations of the Company and shall have all powers
and duties consistent with such position, subject to the direction of the Board.
<PAGE>
c. During the term hereof, and subject to the provisions of Section 9.d,
the Executive shall devote his full business time (other than vacations) and his
best efforts, business judgment, skill and knowledge exclusively to the
advancement of the business and interests of the Company and to the discharge of
his duties and responsibilities hereunder, except as provided in Section 9.d.
The Executive shall not engage in any other business activity or serve in any
industry, trade, governmental position during the term of this Agreement, except
as may be approved by the Board.
d. The Company agrees to propose and recommend to the Board of Directors
that the Executive be elected by the Board as a director to fill the unexpired
term of Fred Stuber, upon Mr. Stuber's resignation as a director on the date
hereof, and the Company further agrees to propose and recommend to the
shareholders of the Company at each appropriate Annual Meeting of such
shareholders during the term hereof, the re-election of the Executive as a
member of the Board.
e. The Executive agrees that he shall as soon as practicable move his
residence and home to Rhode Island, to be able to be close to the Company's
headquarters at North Kingstown, Rhode Island.
4. Compensation and Benefits. As compensation for all services performed
-------------------------
by the Executive under and during the term hereof and subject to performance of
the Executive's duties and of the obligations pursuant to this Agreement:
a. Base Salary. During the term hereof, the Company shall pay the
-----------
Executive base salary at the rate of Three Hundred Thousand Dollars ($300,000)
per annum, payable weekly in accordance with the payroll practices of the
Company for its executives, and subject to increase from time to time by the
Board, in its sole discretion. Such base salary, as from time to time in effect
is hereafter referred to as the "Base Salary".
The Executive shall have the right to defer portions of Base Salary and of
Annual Incentive Award, until a date in a later year, including a date beyond
the termination of his employment with the Company, under provisions that are
mutually satisfactory to the Executive and the Salary Committee of the Board of
Directors.
b. Annual Incentive Award. Executive shall be entitled to an annual
----------------------
incentive award (the "Incentive Award") payable in cash by February 28 of the
following year in an amount up to but not exceeding (i) One Hundred Fifty
Thousand Dollars ($150,000), with all or such portion thereof as is "earned out"
to be dependent, on a sliding scale, on the extent to which the Committee
determines that the Executive has met in each fiscal year, commencing with the
year 1996, the objectives previously established for that fiscal year by the
Compensation Committee, after consultation with the Executive as to the
establishment of such objectives (the "Incentive Award Objectives"). For fiscal
1995 the Executive shall receive a guaranteed Incentive Award of $75,000,
payable by February 28, 1996.
The Incentive Award Objectives shall be established for each fiscal year,
commencing with the year 1996, by February 28 of such year by the Committee,
after consultation with the Executive. The determination as to the amount of
the Incentive Award payable in respect of each year shall be made by the
Committee by not later than March 15 of the following year, and the amount so
determined shall be
<PAGE>
promptly paid by the Company, unless the Executive shall have, prior to the
beginning of the year in respect of which the Incentive Award is payable, by
written notice to the Company, elected to defer payment until January 2 of such
other year as is approved by the Committee. Cash amounts deferred shall bear
interest at a rate equal to the average rate of interest at which the Company
borrows (or can borrow) short term funds from its regular banks during the year.
If this Agreement is terminated under Sections 5a. or 5d., any Incentive
Award in respect of the fiscal year in which such termination occurs to which
the Executive would be entitled (as subsequently determined by the Compensation
Committee) shall be pro-rated based upon the actual number of days elapsed in
such fiscal year through and including the effective date of such termination.
If this Agreement is terminated under Section 5b., any Incentive Award in
respect of the fiscal year in which such termination occurs to which the
employee would be entitled (as subsequently determined by the Compensation
Committee) shall be pro-rated based on the actual number of days elapsed in such
fiscal year through and including the last date prior to the Executive's first
becoming disabled. Any Incentive Award in respect of the fiscal year in which
the Executive is disabled (but in which year this Agreement has not been
terminated on account of disability under Section 5b.) to which the Executive
would be entitled (as subsequently determined by the Compensation Committee)
shall be pro-rated, based on the actual number of days elapsed in such fiscal
year through and including the last date prior to the Executive's first becoming
disabled.
Any and all questions as to interpretation of any Incentive Award
Objectives or any Incentive Award shall be conclusively determined by the
Committee in good faith after consultation with the Executive.
c. Stock Options. The Executive shall receive options, which are
-------------
non-statutory, non-incentive stock options, to purchase Two Hundred Thousand
(200,000) shares (the "Shares") of Class A Common Stock of the Company
exercisable at the market price on the New York Stock Exchange at the close of
business on the effective date of the grant by the Salary Committee of the Board
of Directors under the Company's Equity Incentive Plan (the "Plan"), subject to
approval of the stockholders of amendments to the Plan as proposed to be acted
upon at the May 3 1995 Annual Meeting of Stockholders. The Options have a term
of ten (10) years, will become exercisable, so long as the Executive is an
employee of the Company under this Agreement (or some other agreement), and
subject to the provisions of the Plan for post-termination of employment
exercise or option termination as the case may be as follows:
From and After May 3, 1997 exercisable as to 50% of the Shares;
From and After May 3, 1998 exercisable as to an additional 25% of the Shares;
and
From and After May 3, 1999 exercisable as to an additional 25% of the Shares
The full terms of the Options shall be set forth in the form of Option
Certificate attached as Exhibit A (and the Equity Incentive Plan incorporated
thereby), which shall be the controlling document in all cases.
<PAGE>
d. Vacations. During the term hereof, the Executive shall be entitled to
---------
four (4) weeks of vacation per annum, to be taken at such times and intervals as
shall be determined by the Executive, subject to the reasonable business needs
of the Company.
e. Medical and Hospitalization Insurance. The Executive (and his family)
-------------------------------------
shall be entitled to participate in the Medical and Hospitalization Insurance
benefit plan for Company employees, and the Long-Term Disability Plan for
Company employees.
f. Life Insurance. The Executive shall be entitled to participate in the
--------------
Life Insurance benefit plan for Company employees.
g. SERP. The Company has a Supplemental Executive Retirement Plan, a copy
----
of which has been provided to Executive. The Company agrees to credit annually
to said Plan (or a new plan solely for the Executive) on January 2 for the
benefit of the Executive's account thereunder an amount equal to 10% of Base
Salary paid during the prior fiscal year. Distributions from the SERP shall be
made as provided therein. The Company agrees to enter into a SERP for the
benefit of the Executive as soon as practicable after the date hereof.
h. Other Benefits. During the term hereof, and subject to the eligibility
--------------
criteria of and any contribution thereto generally required of executives of the
Company, the Executive shall be entitled to participate in any other employee
benefit plans from time to time in effect for executives of the Company
generally, including the Company Savings and Retirement Plan for Management
Employees, the Company ESOP and the Amended Profit Incentive Plan, except to the
extent that the Annual Incentive Award provided for in Section 4b above shall
preclude any annual award under the Amended Profit Incentive Plan and except to
the extent that such other plans are in a category of benefit otherwise provided
to the Executive under this Agreement. The Executive is not precluded from
receiving an additional award under the Equity Incentive Plan.
The Company may alter, modify, add to or delete its employee benefit plans
at any time as it, in its sole judgment, determines to be appropriate. In
addition, it is understood that, contingent upon the Company attaining
profitable operations, the Salary Committee of the Board of Directors will
undertake a review of the Company's various compensation, incentive and
retirement programs and its other employee benefit programs, in which review the
Executive will be asked to participate.
i. Business Expenses. The Company shall pay or reimburse the Executive
-----------------
for all reasonable business expenses of the Executive in the performance of his
duties and responsibilities hereunder, subject to such reasonable substantiation
and documentation as may be specified by the Company from time to time.
j. Lump Sum Payment. The Company shall pay the Executive within seven (7)
----------------
days of the effective date of this Agreement an amount equal to $50,000, which
shall be used by the Executive in connection with the sale of his house in
Michigan, purchase of a house in Rhode Island and the like. In addition, the
Company shall reimburse the Executive for moving expenses from Michigan to Rhode
Island and for the reasonable cost of interim lodging until such time as the
Executive has moved into a
<PAGE>
house in Rhode Island and of interim travel expenses to and from his present
residence in Michigan and Rhode Island interim lodging.
5. Termination of Employment and Severance Benefits. Notwithstanding the
------------------------------------------------
provisions of Section 2 hereof, the Executive's employment hereunder shall
terminate prior to the expiration of the term of this Agreement under the
following circumstances:
a. Death. In the event of the Executive's death during the term hereof,
-----
the Company shall pay to the Executive's designated beneficiary or, if no
beneficiary has been designated by the Executive, to his estate, any earned and
unpaid Base Salary that is earned but unpaid, pro-rated through the date of his
death and payment or reimbursement of business expenses accrued prior to the
date of death.
b. Disability.
----------
i. The Company may terminate the Executive's employment hereunder,
upon thirty (30) days written notice to the Executive, in the event
that the Executive becomes disabled during his employment hereunder
through any illness, injury, accident or condition of either a physical
or psychological nature and, as a result, is unable to perform
substantially all of his duties and responsibilities hereunder for one
hundred twenty (120) consecutive days during any period of three
hundred and sixty-five (365) consecutive calendar days.
ii. The Board may designate another employee to act in the
Executive's place during any period of the Executive's disability prior
to termination as provided in b.i above. Notwithstanding any such
designation, the Executive shall continue to receive from the Company
(or under a disability plan) the Base Salary in accordance with Section
4a and benefits in accordance with other portions of Section 4 (other
than 4b., except to the extent that payment of an Incentive Award is
expressly provided for therein), to the extent permitted by the
then-current terms of the applicable benefit plans until the
termination of his employment.
iii. The Executive shall be entitled to participate in the Company's
long-term disability plan, to the same extent as other employees.
iv. If any question shall arise as to whether during any period the
Executive is disabled through any illness, injury, accident or
condition of either a physical or psychological nature so as to be
unable to perform substantially all of his duties and responsibilities
hereunder, the Executive may, and at the request of the Company shall,
submit to a medical examination by a physician selected by the Company,
to whom the Executive or his duly appointed guardian has no reasonable
objection, to determine whether the Executive is so disabled and such
determination shall for the purposes of this Agreement be conclusive of
the issue. If such question shall arise and the Executive shall fail to
submit to such medical examination, the Company's determination of the
issue shall be binding on the Executive.
<PAGE>
c. By the Company for Cause. The Company may terminate the Executive's
------------------------
employment hereunder for Cause at any time upon written notice to the Executive
setting forth in reasonable detail the nature of such Cause, and the Executive's
failure to cure within thirty (30) days. The following, as determined by the
Board in its reasonable judgment, shall constitute Cause for termination:
The Executive's willful failure to perform (other than by reason of
disability) or negligence (measured against standards generally prevailing
in the Company's industry) in the performance of his material duties and
responsibilities to the Company; or other deliberate willful action by the
Executive that is materially harmful to the business, interests or
reputation of the Company;
For purposes of Section 5c., no act, or failure to act, shall be "willful"
unless done, or omitted to be done, without reasonable belief that the action or
omission was in the best interests of the Company.
Notwithstanding the foregoing, the Executive shall not be deemed to have
been terminated for Cause unless and until there shall have been delivered to
him a notice of termination, and such termination shall have been approved by
the vote of two-thirds of the members of the Board of Directors at a meeting of
the Board (after reasonable notice to the Executive and an opportunity for him,
together with counsel, to be heard before the Board of Directors) finding that,
in the good faith opinion of the Board of Directors, the above standard of
termination for Cause was met in such case and that such Cause was not cured.
Upon the giving of notice of termination of the Executive's employment
hereunder for Cause following the Executive's failure to cure, the Company shall
have no further obligation or liability to the Executive, other than for Base
Salary earned and unpaid at the date of termination, any Incentive Award that is
determined to be earned in accordance with Section 4b. and this Section, and for
payments or reimbursement of business expenses accrued prior to the date of
termination. Upon termination of employment for Cause, all options shall
terminate.
For purposes of this Section 5c., so long as the Executive is an employee
of the Company at the end of the fiscal year in respect of which an Incentive
Award is subsequently determined by the Committee to be payable, he (or his
estate in the event of his subsequent death) shall be entitled to receive the
Incentive Award so determined by the Compensation Committee by not later than
March 15 of the following year, whether or not he is on that date of
determination an employee of the Company.
d. By the Company Other than for Cause. The Company may terminate the
-----------------------------------
Executive's employment hereunder other than for Cause at any time upon notice to
the Executive, provided that the Board of Directors determines, after
consultation with the Executive and after setting forth the reasons for the
Board's actions, that retention of the Executive as the Chief Executive Officer
would no longer be in the best interests of the Company. In the event of such
termination, then for the remaining period of the term of this Agreement, the
Company shall continue to pay the Executive the Base Salary at the rate in
effect on the date of termination, provided that the period under which Base
Salary shall be payable under this Section shall in no event be less than twelve
(12) months, and provided further that this 12 month provision shall continue in
effect if the Executive remains an employee of the Company after the expiration
of the term of this Agreement and is later terminated by the Company other than
for cause.
<PAGE>
Subject to any employee contribution applicable to the Executive on the
date of termination, the Company shall continue to contribute, for such
remaining period of the term of this Agreement, to the cost of the Executive's
participation (including his family) in the Company's group medical and
hospitalization insurance plans and group life insurance plan, provided that the
Executive is entitled to continue such participation under applicable law and
plan terms. Options which are exercisable immediately prior to any such
termination shall be exercisable in accordance with the provisions of the Plan.
Reference is made to the applicable provisions of the next to last
paragraph of Section 4b. The provisions of this subsection 5d shall control the
provisions of Section 4c.
e. By the Executive for Good Reason Following a Change in Control. The
--------------------------------------------------------------
Executive may terminate his employment hereunder for Good Reason following a
Change in Control (as defined below), upon notice to the Company setting forth
in reasonable detail the nature of such Good Reason, and the Company's failure
to remedy such matter within thirty (30) days. The following shall constitute
Good Reason for termination by the Executive:
i. Failure of the Company to continue the Executive in the position
of President and Chief Executive Officer;
ii. Material diminution in the nature or scope of the Executive's
responsibilities, duties or authority; or
iii. Material failure of the Company to provide the Executive the Base
Salary and benefits in accordance with the terms of Section 4 hereof
(including the Incentive Award to the extent earned out as determined in
Section 4b. above).
In the event of termination in accordance with this Section 5e, then, for the
remaining term of this Agreement, the Company shall continue to pay the
Executive the Base Salary at the rate in effect on the date of termination.
Subject to any employee contribution applicable to the Executive on the date of
termination, the Company shall continue to contribute for such remaining period
of the term of this Agreement to the cost of the Executive's participation
(including his family) in the Company's group medical and hospitalization
insurance plans and group life insurance plan, provided that the Executive is
entitled to continue such participation under applicable law and plan terms.
Options exercisable immediately prior to any such termination shall be
exercisable in accordance with the provisions of the Plan.
The provisions of this subsection 5e shall control the provisions of
Sections 4b and 4.c.
6. Effect of Termination. The provisions of this Section 6 shall apply
---------------------
to termination due to the expiration of the term, termination pursuant to
Section 5 or otherwise.
a. Except for benefits continued pursuant to Section 5.d and Section 5.e,
benefits shall terminate pursuant to the terms of the applicable benefit plans
based on the date of termination of the
<PAGE>
Executive's employment without regard to any continuation of Base Salary or
other payment to the Executive following such date of termination.
b. Provisions of this Agreement shall survive any termination if so
provided herein or if necessary or desirable fully to accomplish the purposes of
such provision, including without limitation the obligations of the Executive
under Sections 7, 8 and 9 hereof. The obligation of the Company to make
payments to or on behalf of the Executive under Section 5d and 5e hereof is
expressly conditioned upon the Executive's continued full performance of
obligations under Sections 7, 8 and 9 hereof. The Executive agrees that, except
as expressly provided in Section 5d and 5e, no compensation is earned after
termination of employment or as a result of termination of employment.
7. Confidential Information.
------------------------
a. The Executive acknowledges that the Company and its Subsidiaries
continually develop Confidential Information, that the Executive may develop
Confidential Information for the Company or its Subsidiaries and that the
Executive may learn of Confidential Information during the course of employment.
The Executive will comply with the policies and procedures of the Company and
its Subsidiaries for protecting Confidential Information and shall never
disclose to any Person (except as required by applicable law or for the proper
performance of his duties and responsibilities to the Company and its
Subsidiaries), or use for his own benefit or gain, any Confidential Information
obtained by the Executive incident to his employment or other association with
the Company or any of its Subsidiaries. The Executive understands that this
restriction shall continue to apply after his employment terminates, regardless
of the reason for such termination.
b. All documents, records, tapes and other media of every kind and
description relating to the business, present or otherwise, of the Company or
its Subsidiaries and any copies, in whole or in part, thereof (the "Documents"),
whether or not prepared by the Executive, shall be the sole and exclusive
property of the Company and its Subsidiaries. The Executive shall safeguard all
Documents and shall surrender to the Company at the time his employment
terminates, or at such earlier time or times as the Board or its designee may
specify, all Documents then in the Executive's possession or control.
8. Assignment of Rights to Intellectual Property. The Executive shall
---------------------------------------------
promptly and fully disclose all Intellectual Property to the Company. The
Executive hereby assigns and agrees to assign to the Company (or as otherwise
directed by the Company) the Executive's full right, title and interest in and
to all Intellectual Property. The Executive agrees to execute any and all
applications for domestic and foreign patents, copyrights or other proprietary
rights and to do such other acts (including without limitation the execution and
delivery of instruments of further assurance or confirmation) requested by the
Company to assign the Intellectual Property to the Company and to permit the
Company to enforce any patents, copyrights or other proprietary rights to the
Intellectual Property. The Executive will not charge the Company for time spent
in complying with these obligations. All copyrightable works that the Executive
creates shall be considered "work made for hire".
9. Restricted Activities. The Executive agrees that some restrictions on
---------------------
his activities during and after his employment are necessary to protect the
goodwill, Confidential Information and other
<PAGE>
legitimate interests of the Company and its Subsidiaries, and that the agreed
restrictions set forth below will not deprive the Executive of the ability to
earn a livelihood:
a. While the Executive is employed by the Company and for two years after
his employment terminates (the "Non-Competition Period"), the Executive shall
not, directly or indirectly, whether as owner, partner, investor, consultant,
agent, employee, co-venturer or otherwise, compete with the Company or any of
its Subsidiaries within the United States, or within any foreign county in which
the Products are sold at the date of termination of employment, or undertake any
planning for any business competitive with the Company or any of its
Subsidiaries. Specifically, but without limiting the foregoing, the Executive
agrees not to engage in any manner in any activity that is directly or
indirectly competitive with the business of the Company or any of its
Subsidiaries as conducted or under consideration at any time during the
Executive's employment. Restricted activity also includes without limitation
accepting employment or a consulting position with any Person who is, or at any
time within twelve (12) months prior to termination of the Executive's
employment has been, a distributor of the Company or any of its Subsidiaries.
For the purposes of this Section 9, the business of the Company and its
Subsidiaries shall include all Products.
b. The Executive further agrees that while he is employed by the Company
and during the Non-Competition Period, the Executive will not hire or attempt to
hire any employee of the Company or any of its Subsidiaries, assist in such
hiring by any Person, encourage any such employee to terminate his or her
relationship with the Company or any of its Subsidiaries, or solicit or
encourage any customer or vendor of the Company or any of its Subsidiaries to
terminate its relationship with them, or, in the case of a customer, to conduct
with any Person any business or activity which such customer conducts or could
conduct with the Company or any of its Subsidiaries.
c. The provisions of this Section 9 shall not be deemed to preclude the
Executive from employment during the Non-Competition Period following
termination of employment hereunder by a corporation, some of the activities of
which are competitive with the business of the Company, if the Executive's
employment does not relate, directly or indirectly, to such competitive
business, and nothing contained in this Section 9 shall be deemed to prohibit
the Executive, during the Non-Competition Period following termination of
employment hereunder, from acquiring or holding, solely as an investment,
publicly traded securities of any competitor corporation so long as such
securities do not, in the aggregate, constitute one-half of 1% of the
outstanding voting securities of such corporation.
Without limiting the foregoing, it is understood that the Company shall not
be obligated to continue to make the payments specified in Section 5d and 5e in
the event of a material breach by the Executive of the provisions of Sections 7,
8 or 9 of this Agreement, which breach continues without having been cured
within 30 days after written notice to the Executive specifying the breach in
reasonable detail.
d. The Executive owns a pre-existing corporation known as Curtin &
Associates, Inc. which develops computer software for business applications.
The business of Curtin & Associates, Inc. does not compete with the business of
the Company. The Executive does not participate in the day-to-day operations of
Curtin & Associates, Inc. and he represents and agrees that his part-time
responsibilities to Curtin & Associates, Inc. will not conflict with his
obligations under this Agreement. The provisions of
<PAGE>
this Section 9 shall not preclude the Executive's ownership and part time
involvement in the operations of Curtin & Associates, Inc. so long as such
business does not compete with the Company.
10. Enforcement of Covenants. The Executive acknowledges that he has
------------------------
carefully read and considered all the terms and conditions of this Agreement,
including the restraints imposed upon him pursuant to Sections 7, 8 and 9
hereof. The Executive agrees that said restraints are necessary for the
reasonable and proper protection of the Company and its Subsidiaries and that
each and every one of the restraints is reasonable in respect to subject matter,
length of time and geographic area. The Executive further acknowledges that,
were he to breach any of the covenants contained in Sections 7, 8 or 9 hereof,
the damage to the Company would be irreparable. The Executive therefore agrees
that the Company, in addition to any other remedies available to it, shall be
entitled to preliminary and permanent injunctive relief against any breach or
threatened breach by the Executive of any of said covenants, without having to
post bond. The parties further agree that, in the event that any provision of
Section 7, 8 or 9 hereof shall be determined by any court of competent
jurisdiction to be unenforceable by reason of its being extended over too great
a time, too large a geographic area or too great a range of activities, such
provision shall be deemed to be modified to permit its enforcement to the
maximum extent permitted by law.
11. Conflicting Agreements. The Executive hereby represents and warrants
----------------------
that the execution of this Agreement and the performance of his obligations
hereunder will not breach or be in conflict with any other agreement to which
the Executive is a party or is bound and that the Executive is not now subject
to any covenants against competition or similar covenants that would affect the
performance of his obligations hereunder. The Executive will not disclose to or
use on behalf of the Company any proprietary information of a third party
without such party's consent.
12. Indemnification. The Company shall indemnify the Executive to the
---------------
extent provided for Company executive officers in its then current Articles of
Incorporation or By-Laws. The Executive agrees to promptly notify the Company
of any actual or threatened claim arising out of or as a result of his
employment with the Company.
13. Full Settlement. Following a termination of employment, the Executive
---------------
shall not be obligated to seek other employment or take any other action by way
of mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement and such amounts shall not be reduced whether or
not the Executive obtains other employment.
14. Definitions. Words or phrases which are initially capitalized or are
-----------
within quotation marks shall have the meanings provided in this Section 13 and
as provided elsewhere herein. For purposes of this Agreement, the following
definitions apply:
a. "Confidential Information" means any and all information of the Company
and its Subsidiaries that is not generally known by others with whom they
compete or do business, or with whom they plan to compete or do business and any
and all information not readily available to the public, which, if disclosed by
the Company or its Subsidiaries would assist in competition against them.
Confidential Information includes without limitation such information relating
to (i) the development,
<PAGE>
research, testing, manufacturing, plant operational processes, marketing and
financial activities, including costs, profits and sales, of the Company and its
Subsidiaries, (ii) the Products and all formulas therefor, (iii) the costs,
sources of supply, financial performance and strategic and other business plans
of the Company and its Subsidiaries, (iv) the identity and special needs of the
customers and suppliers of the Company and its Subsidiaries and (v) the people
and organizations with whom the Company and its Subsidiaries have business
relationships and those relationships. Confidential Information also includes
comparable information that the Company or any of its Subsidiaries have received
belonging to others or which was received by the Company or any of its
Subsidiaries with any understanding that it would not be disclosed.
b. "Intellectual Property" means inventions, discoveries, developments,
methods, processes, formulas, compositions, works, concepts and ideas (whether
or not patentable or copyrightable or constituting trade secrets) conceived,
made, created, developed or reduced to practice by the Executive (whether alone
or with others, whether or not during normal business hours or on or off Company
premises) during the Executive's employment that relate to either the Products
or any prospective activity of the Company or any of its Subsidiaries.
c. "Products" mean all products planned, researched, developed, tested,
manufactured, sold, licensed, leased or otherwise distributed or put into use by
the Company or any of its Subsidiaries, together with all services provided or
planned by the Company or any of its Subsidiaries, during the Executive's
employment.
d. A "Change in Control" shall be deemed to have occurred if:
(a) any person as such term is used in Sections 13(d) and 14(d) of the 1934
Act (other than (i) the Company, (ii) members of or trusts for the
benefit of the family of Henry D. Sharpe, (iii) Finmeccanica S.A. or
its affiliates; (iv) any subsidiary of the Company; (v) any trustee or
other fiduciary holding securities under an employee benefit plan of
the Company or of any subsidiary of the Company; or (vi) any company
owned, directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership of stock of the
Company, who is or becomes the beneficial owner (as defined in Section
13(d) of the 1934 Act), together with all affiliates and associates (as
such terms are used in Rule 12b-2 of the General Rules and Regulations
under the 1934 Act) of such person, directly or indirectly, of
securities of the Company representing the greater of (A) 35% or more
of the combined voting power of the Company's then outstanding
securities or (B) more than the combined voting power of the Company's
then outstanding securities held in the aggregate by persons in clauses
(ii) - (v) of this Clause (a);
(b) the shareholders of the Company approve a merger or consolidation of
the Company with any other company, other than (1) a merger or
consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity), in combination with the ownership
of any trustee or other fiduciary holding securities under an employee
benefit plan of the Company or any subsidiary of the Company, at least
65% of the combined voting power of the voting securities of the
Company or such surviving
<PAGE>
entity outstanding immediately after such merger or consolidation; or
(2) a merger or consolidation affected to implement a recapitalization
of the Company (or similar transaction) in which no person (with the
exception given and the method of determining beneficial ownership used
in clause (a) of this definition) acquires more than 50% of the
combined voting power of the Company's then outstanding securities; or
(c) during any period of two consecutive years (not including any period
prior to the execution of this Agreement), individuals who, at the
beginning of such period, constitute the Board, and any new director
(other than a director designated by a person who has entered into an
agreement with the Company to effect a transaction described in clause
(a), (b) or (d) of this definition) whose election by the Board or
nomination for election by the Company's stockholders was approved by a
vote of at least two-thirds (2/3) of the directors then still in office
who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved cease
for any reason to constitute at least a majority thereof; or
(d) the shareholders of the Company approve a plan of complete liquidation
of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets.
15. Withholding. All payments made by the Company under this Agreement
-----------
shall be reduced by any tax or other amounts required to be withheld by the
Company under applicable law.
16. Assignment. Neither the Company nor the Executive may make any
----------
assignment of this Agreement or any interest herein, by operation of law or
otherwise, without the prior written consent of the other; provided, however,
that, in the event that the Company shall hereafter effect a reorganization,
consolidate with, or merge into, any other Person or transfer all or
substantially all of its properties or assets to any other Person, the Company
shall require such Person or the resulting entity to assume expressly and agree
to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it. This Agreement shall inure to the
benefit of and be binding upon the Company and the Executive, their respective
successors, executors, administrators, heirs and permitted assigns.
17. Severability. If any portion or provision of this Agreement shall to
------------
any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
18. Waiver. No waiver of any provision hereof shall be effective unless
------
made in writing and signed by the waiving party. The failure of either party to
require the performance of any term or obligation of this Agreement, or the
waiver by either party of any breach of this Agreement, shall not prevent any
subsequent enforcement of such term or obligation or be deemed a waiver of any
subsequent breach.
<PAGE>
19. Notices. Any and all notices, requests, demands and other
-------
communications provided for by this Agreement shall be in writing and shall be
effective when delivered in person or deposited in the United States mail,
postage prepaid, registered or certified, and addressed to the Executive at his
last known address on the books of the Company or, in the case of the Company,
at its principal place of business, attention Chief Financial Officer, with a
copy to Ropes & Gray, One International Place, Boston, MA 02110, Attention:
Howard K. Fuguet, Esq., or to such other address as either party may specify by
notice to the other.
20. Medical Physical. It is understood that the offer by the Company set
----------------
forth in this Agreement is subject to the Executive's passing, to the reasonable
satisfaction of the Company, a complete medical physical.
21. Entire Agreement. This Agreement constitutes the entire agreement
----------------
between the parties and supersedes all prior communications, representations and
understandings, written or oral, with respect to the terms and conditions of the
Executive's employment.
22. Amendment. This Agreement may be amended or modified only by a
---------
written instrument signed by the Executive and by a expressly authorized officer
of the Company.
23. Governing Law and Consent to Jurisdiction. This is a Rhode Island
-----------------------------------------
contract and shall be construed and enforced under and be governed in all
respects by the laws of the State of Rhode Island, without regard to the
conflict of laws principles thereof. Each of the Company and the Executive (i)
irrevocably submits to the jurisdiction of the United States District Court for
the District of Rhode Island and to the jurisdiction of the state courts of the
State of Rhode Island for the purpose of any suit or other proceeding arising
out of or based upon this Agreement or the subject matter hereof and agrees that
any such proceeding shall be brought or maintained only in such court, and (ii)
waives, to the extent not prohibited by applicable law and agrees not to assert
in any such proceedings, any claim that it is not subject personally to the
jurisdiction of the above-named courts, that he or it is immune from
extraterritorial injunctive relief or other injunctive relief, that any such
proceeding brought or maintained in a court provided for above may not be
properly brought or maintained in such court, should be transferred to some
other court or should be stayed or dismissed by reason of the pendency of some
other proceeding in some other court, or that this Agreement or the subject
matter hereof may not be enforced in or by such court.
IN WITNESS WHEREOF, this Agreement has been executed by the Company, by its
duly authorized officer, and by the Executive, as of the date first above
written.
THE EXECUTIVE: BROWN & SHARPE MANUFACTURING
COMPANY
/s/ Frank T. Curtin By: /s/ Henry D. Sharpe, Jr.
------------------- ------------------------
Title: Chairman of the Board of Directors
----------------------------------
<PAGE>
EXHIBIT 11
----------
BROWN & SHARPE MANUFACTURING COMPANY
------------------------------------
COMPUTATION OF PER SHARE DATA
-----------------------------
(Dollars in Thousands Except Per Share Data)
<TABLE>
<CAPTION>
Quarter Ended Half-Year Ended
------------- ---------------
June 30, July 2, June 30, July 2,
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Primary:
Average shares outstanding 8,702,828 5,191,299 8,691,487 5,114,403
Net effect of dilutive stock options
-- based on the treasury stock method
using average market price 2,413 - 1,206 4,854
---------- ---------- ---------- ----------
Totals 8,705,241 5,191,299 8,692,693 5,119,248
========== ========== ========== ==========
Net income (loss) $ 1,045 $ (1,368) $ (410) $ (4,242)
========== ========== ========== ==========
Per share amount $ .12 $ (.26) $ (.05) $ (.83)
========== ========== ========== ==========
Fully diluted:
Average shares outstanding 8,702,828 5,191,299 8,691,487 5,114,403
Net effect of dilutive stock options
-- based on the treasury stock
method using average market
price which is greater than
quarter-end market price 2,413 - 5,706 4,845
Assumed conversion of 9 1/4%
convertible subordinated
debentures 571,429 609,524 571,429 609,524
---------- ---------- ---------- ----------
Totals 9,276,670 5,800,823 9,268,622 5,728,772
========== ========== ========== ==========
Net income (loss) $ 1,045 $ (1,368) $ (410) $ (4,242)
Add 9 1/4% convertible
subordinated debenture
interest, net of federal
income tax effect 246 263 493 518
---------- ---------- ---------- ----------
Totals $ 1,291 $ (1,105) $ 83 $ (3,724)
========== ========== ========== ==========
Per share amount $ .14 $ (.19) $ .01 $ (.65)
========== ========== ========== ==========
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> DEC-31-1994
<PERIOD-END> JUN-30-1995
<CASH> 6,571
<SECURITIES> 0
<RECEIVABLES> 105,233
<ALLOWANCES> (3,995)
<INVENTORY> 98,950
<CURRENT-ASSETS> 217,374
<PP&E> 140,641
<DEPRECIATION> 91,063
<TOTAL-ASSETS> 281,953
<CURRENT-LIABILITIES> 127,477
<BONDS> 14,000
<COMMON> 8,718
0
0
<OTHER-SE> 70,987
<TOTAL-LIABILITY-AND-EQUITY> 281,953
<SALES> 155,062
<TOTAL-REVENUES> 155,062
<CGS> 108,174
<TOTAL-COSTS> 108,174
<OTHER-EXPENSES> 43,337
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,948
<INCOME-PRETAX> (210)
<INCOME-TAX> 200
<INCOME-CONTINUING> (410)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (410)
<EPS-PRIMARY> (0.05)
<EPS-DILUTED> (0.05)
</TABLE>
