<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 September 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
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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; 8,165,115 Class A common
stock, 529,663 Class B common stock, par value $1 per share, outstanding as of
September 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 Nine-Months Ended
--------------------- -------------------------
Sep. 30, 1995 Oct. 1, 1994 Sep. 30, 1995 Oct. 1, 1994
------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Net sales $ 76,945 $ 39,641 $ 232,007 $ 119,452
Cost of goods sold 54,263 28,610 162,437 83,947
Selling, general and
administrative expense 19,948 12,868 63,038 38,796
Restructuring expense 89 1,000 336 1,000
------- ------- -------- ---------
Operating profit (loss) 2,645 (2,837) 6,196 (4,291)
Interest expense 2,787 1,736 6,735 4,459
Other income, net 362 158 549 393
------- ------- -------- ---------
Income (loss) before income taxes 220 (4,415) 10 (8,357)
Income tax provision 0 200 200 500
------- ------- -------- ---------
Net income (loss) $ 220 $ (4,615) $ (190) $ (8,857)
======= ======= ======== =========
Primary and fully diluted
income (loss) per common share $ .03 $ (.86) $ (.02) $ (1.71)
======= ======= ======== =========
Weighted average shares
outstanding and common
stock equivalents
during the period 8,779,246 5,350,140 8,692,584 5,192,982
========= ========= ========= =========
</TABLE>
* The accompanying notes are an integral part of the financial statements.
2
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BROWN & SHARPE MANUFACTURING COMPANY
------------------------------------
CONSOLIDATED BALANCE SHEET
--------------------------
(Dollars in Thousands)
<TABLE>
<CAPTION>
Sep. 30, 1995 December 31, 1994
ASSETS (Unaudited)
-------------- -----------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 5,011 $ 6,676
Accounts receivable, net of allowances for
doubtful accounts of $4,170 and $3,103 100,479 108,234
Inventories 85,558 88,639
Deferred income taxes, less $38,100 valuation allowance 3,800 2,000
Prepaid expenses and other current assets 8,352 5,981
-------- --------
Total current assets 203,200 211,530
Property, plant and equipment:
Land 7,210 6,858
Buildings and improvements 36,810 33,124
Machinery and equipment 100,906 85,583
-------- --------
144,926 125,565
Less-accumulated depreciation 92,052 80,210
-------- --------
52,874 45,355
Other assets 25,788 15,389
-------- --------
$ 281,862 $ 272,274
======== ========
LIABILITIES AND SHAREOWNERS' EQUITY
CURRENT LIABILITIES:
Notes payable and current
installments of long-term debt $ 43,275 $ 22,398
Accounts payable 40,581 36,896
Accrued expenses and income taxes 37,404 49,353
-------- --------
Total current liabilities 121,260 108,647
Long-term debt 58,085 70,215
Other long-term liabilities 4,836 -
Deferred income taxes 2,354 1,737
Unfunded accrued pension cost 5,781 5,035
Termination indemnities 7,992 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 8,188,707 shares in 1995
and 8,122,086 shares in 1994 8,189 8,122
Class B, par value $1; authorized 2,000,000 shares;
issued and outstanding 529,663 shares in 1995
and 534,821 shares in 1994 530 535
Additional paid in capital 66,863 66,412
Earnings employed in the business (10,148) (9,958)
Cumulative foreign currency translation adjustment 16,793 14,530
Treasury stock: 23,592 shares in 1995 and 7,492
in 1994 at cost (270) (151)
Unearned compensation (403) (565)
-------- --------
Total shareowners' equity 81,554 78,925
-------- --------
$ 281,862 $ 272,274
======== ========
</TABLE>
* The accompanying notes are an integral part of the financial statements.
3
<PAGE>
BROWN & SHARPE MANUFACTURING COMPANY
------------------------------------
CONSOLIDATED STATEMENT OF CASH FLOWS
------------------------------------
(Dollars in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
For the Nine-Months Ended
-------------------------
Sep. 30, 1995 Oct. 1, 1994
------------- ------------
<S> <C> <C>
CASH PROVIDED BY (USED IN) OPERATIONS:
Net income (loss) $ (190) $ (8,857)
Adjustment for Noncash Items:
Depreciation and amortization 7,482 4,223
Pension credits and charges 40 336
Deferred income taxes - 100
Unfunded pension 314 -
Termination Indemnities 196 -
Changes in Working Capital:
Accounts receivable 3,579 8,410
Inventories (4,939) 1,176
Prepaid expenses and other current assets (393) (751)
Accounts payable and accrued expenses (9,190) (2,658)
--------- ---------
Net Cash Provided by (Used in) Operations (3,101) 1,979
--------- ---------
INVESTMENT TRANSACTIONS:
Capital expenditures (5,372) (2,031)
Cash equivalent pledged - 113
Other investing activities 253 (1,326)
--------- ---------
Cash (Used in) Investment Transactions (5,119) (3,244)
--------- ---------
FINANCING TRANSACTIONS:
Increase in long-term and short-term debt 13,155 37,301
Payment of long-term and short-term debt (8,288) (17,457)
Other financing activities 557 2,444
--------- ---------
Cash Provided by Financing Transactions 5,424 22,288
--------- ---------
EFFECT OF EXCHANGE RATE CHANGES ON CASH 1,131 (1,251)
--------- ---------
CASH AND CASH EQUIVALENTS:
Increase (Decrease) during the period (1,665) 19,772
Beginning balance 6,676 2,094
--------- ---------
Ending balance $ 5,011 $ 21,866
========= =========
SUPPLEMENTARY CASH FLOW INFORMATION:
Interest paid $ 4,629 $ 3,347
========= =========
Taxes paid $ 1,703 $ 889
========= =========
</TABLE>
* The accompanying notes are an integral part of the financial statements.
4
<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 nine-month periods ended
September 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 nine months of
1995 and 1994 consisted of 39 and 40 weeks, respectively, while the third
quarters of 1995 and 1994 consisted of 13 weeks each.
3. On September 28, 1994, Brown & Sharpe Manufacturing Company and its
wholly-owned subsidiary, Brown & Sharpe International Capital
Corporation, acquired the business of DEA, S.p.A. in exchange for common
stock of the Company with a market value of $22,856,000. In addition, the
Company incurred acquisition costs amounting to $2,301,000. The
transaction was recorded using the purchase method of accounting with the
acquired assets and assumed liabilities recorded in 1994 using
preliminary estimates that were subject to adjustment pending a worldwide
study of the fair value of the acquired assets and assumed liabilities.
Because DEA was acquired late in 1994 and was a complex worldwide
operation that required a comprehensive review of asset values and
liabilities and a significant part of the study had to take into
consideration the integration of DEA into the Measuring Systems Group,
the final assessment of asset values, restructuring the manufacturing and
marketing organization, and making other necessary changes was not
completed until the third quarter of 1995. The determination of the final
fair values resulted in adjustments consisting of changes from initially
determined values as of September 28, 1994 amounting to an increase in
goodwill; property, plant and equipment; deferred incomes taxes; and
other assets amounting to $10,360,000, $4,142,000, $1,800,000, and
$2,844,000, respectively, and a decrease in inventory and accounts
receivable amounting to $12,582,000 and $1,175,000, respectively.
Adjustments to other balance sheet amounts were individually not
significant.
As a result of the adjustments to the preliminary estimates, net income
for the three months ended September 30, 1995 increased $1,171,000.
4. The composition of inventory is as follows:
<TABLE>
<CAPTION>
Sep. 30, 1995 Dec. 31, 1994
------------- -------------
<S> <C> <C>
Parts, raw materials, and supplies $ 37,899 $ 42,665
Work in process 15,811 17,069
Finished goods 31,848 28,905
------- -------
$ 85,558 $ 88,639
======= =======
</TABLE>
5
<PAGE>
5. Income taxes include provisions for 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 nine
months of 1995 and 1994 is $200 and $500, respectively.
6. In 1994, and for the nine-month period ended September 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 and fully diluted
earnings per share for the quarter ended September 30, 1995 is based upon
the weighted average number of common shares outstanding and common stock
equivalents.
7. 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 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.
6
<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 three month and nine month periods ended September
30, 1995 include the results of the acquired operations. However, DEA's results
are not included for the three month and nine months periods ended October 1,
1994. The ending consolidated balance sheet for both periods presented
(September 30, 1995 and December 31, 1994) includes DEA's assets and
liabilities. As discussed in Footnote 3 of the consolidated financial
statements, the Company recognized in the quarter ended September 30, 1995, $1.2
million of income as a result of adjustments to the preliminary estimates of the
fair values of the assets and liabilities of DEA S.p.A. at the date of its
acquisition by the Company. The revised estimates resulted in decreases in cost
of goods sold and selling, general and administrative expense of $.3 million and
$.4 million, respectively and an increase in other income of $.5 million.
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 nine
months ended September 30, 1995 and October 1, 1994:
<TABLE>
<CAPTION>
Quarters Ended Nine-Months Ended
-------------- -----------------
Sep.30 Oct.1 Sep.30 Oct.1
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of goods sold 70.5 72.2 70.0 70.3
Selling, general and administrative expense 26.0 32.4 27.2 32.5
Restructuring charges .1 2.5 .1 .8
----- ------ ----- -----
Operating profit (loss) 3.4 (7.1) 2.7 (3.6)
Interest expense 3.6 4.4 2.9 3.8
Other income, net .5 .4 .2 .4
----- ------ ----- -----
Income (loss) before income taxes .3 (11.1) .0 (7.0)
Income tax provision .0 .5 .1 .4
----- ------ ----- -----
Net income (loss) .3% (11.6)% (.1)% (7.4)%
===== ====== ===== =====
</TABLE>
RESULTS OF OPERATIONS
(Quarter Ended September 30, 1995 compared to Quarter Ended October 1, 1994)
ORDERS AND BACKLOG. Orders during the third quarter of 1995 totaled $77.6
million compared to $44.2 million for the third quarter of 1994. DEA, which was
acquired on September 28, 1994, represented $24.4 million in orders during the
third quarter of 1995, and foreign currency fluctuations caused a $3.5 million
increase in third quarter 1995 orders compared to the third quarter of 1994.
The third quarter, after reflecting the effect of DEA and foreign exchange,
includes increased orders in the Precision Measuring Instruments Division,
Measuring Systems Division, and Custom Metrology Division. Backlog at September
30, 1995 decreased to $65.0 million compared to $66.2 million at the end of the
second quarter 1995.
NET SALES. Net sales in the third quarter of 1995 were $76.9 million, compared
to $39.6 million in the third quarter of 1994. DEA's sales were $22.1 million
in the third quarter of 1995. In addition, foreign currency exchange rate
fluctuations caused an increase in net sales in the third quarter of 1995 of
$3.6 million as compared to the third quarter of 1994.
7
<PAGE>
GROSS PROFIT. Gross profit margin increased to 29.5% of sales in the third
quarter of 1995 from 27.8% in the third quarter of 1994. The majority of this
percent increase resulted from increased sales volume in the Precision Measuring
Instruments Division which had substantially improved profit margins.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE. Selling, general and
administrative expense as a percentage of net sales decreased to 26.0% in the
third quarter of 1995 from 32.4% in the third quarter of 1994, reflecting
primarily the benefits of the acquisition consolidation savings actions that
have previously been taken by the Company. Dollar spending, however, increased
$7.0 million in the third quarter of 1995 from the third quarter of 1994 which
was primarily due to the inclusion of DEA selling, general and administrative
expense in the third quarter of 1995 amounting to $4.9 million, which was not
included in the third quarter of 1994. The increase included $1.3 million of
realized and unrealized foreign exchange losses that were recognized in the same
quarter. Realized and unrealized foreign exchange gains amounted to $.1 million
in the third quarter of 1994.
RESTRUCTURING CHARGES. Restructuring charges of $.1 million and $1 million,
were provided for in the third quarters of 1995 and 1994, respectively,
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 $2.6 million in the third quarter
of 1995. This compared to an operating loss of $2.8 million in the third
quarter of 1994. In the United States, an operating loss of $.5 million was
recognized for the third quarter of 1995 compared to an operating loss of $.8
million in the third quarter of 1994. Foreign operations had an operating
profit of $3.1 million in the third quarter of 1995 as compared to an operating
loss of $1.1 million in the third quarter of 1994. The improved third quarter
operating results reflect the improvement in European operations and the effect
of the revised fair market valuation estimates of the 1994 DEA acquisition.
INTEREST EXPENSE. Interest expense totaled $2.8 million in the third quarter of
1995 compared to $1.7 million in the third quarter of 1994. This increase
reflects a $28.1 million increase in average borrowings over the comparable
period in 1994. $13.8 million of the increase resulted from debt related to the
DEA acquisition, and $11.3 million resulted from additional working capital
requirements, including additional costs related to restructuring. The
remainder of the increase is due to the impact of changes in foreign exchange
rates on offshore borrowings.
NET INCOME/(LOSS). Brown & Sharpe had a net income of $0.2 million ($.03 per
share) in the third quarter of 1995, compared to a net loss of $4.6 million
($.86 per share) in the third quarter of 1994.
RESULTS OF OPERATIONS
(Nine-Months Ended September 30, 1995 compared to Nine-Months Ended October 1,
1994)
ORDERS AND BACKLOG. Orders during the first nine-months of 1995 totaled $234.9
million compared to $128.9 million for the first nine-months of 1994. DEA, which
was acquired on September 28, 1994, represented $76.1 million in orders during
the first nine-months of 1995, and foreign currency fluctuations caused a $9.8
million increase in the first nine-months of 1995 orders compared to the first
nine-months of 1994. Backlog at September 30, 1995 increased to $65.0 million
compared to $61.0 million at year-end 1994.
NET SALES. Net sales in the first nine-months of 1995 were $232.0 million
compared to $119.5 million for the first nine-months of 1994. DEA's sales were
$74.9 million in the first nine-months of 1995. Foreign currency exchange rate
fluctuations caused an increase in net sales of $9.1 million in the first nine-
months of 1995 as compared to the first nine-months of 1994. The remaining
increase was primarily due to increased sales of the PMI Division and MS Group
amounting to approximately $16.2 million and $10.8 million, respectively.
8
<PAGE>
GROSS PROFIT. Gross profit margin increased slightly to 30.0% in the first
nine-months of 1995 from 29.7% in the first nine-months of 1994. The 1995 gross
profit margin would have increased by .6% rather than .3%, except for the effect
of inventory valuation reserves of $.8 million recorded in 1995.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE. Selling, general and
administrative expense as a percentage of net sales decreased to 27.2% in the
first nine-months of 1995 from 32.5% in the first nine-months of 1994,
reflecting the acquisition consolidation savings actions of the Company. Dollar
spending increased in the first nine-months of 1995 by $24.2 million from the
first nine-months of 1994, which was primarily due to the inclusion of DEA
selling, general and administrative expense amounting to $16.9 million in the
first nine-months 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 $.6 million were recognized during the first nine-months of 1995 and gains of
$.1 million were recognized in the first nine-months of 1994.
OPERATING PROFIT (LOSS). Brown & Sharpe generated an operating profit of $6.2
million in the first nine-months of 1995. This compared to an operating loss of
$4.3 million in the first nine-months of 1994. In the United States, operating
loss for the first nine-months of 1995 totaled $1.7 million as compared to an
operating profit of $.4 million in the first nine-months of 1994. Foreign
operations generated an operating income of $7.9 million in the first nine-
months of 1995 as compared to an operating loss of $3.7 million in the first
nine-months of 1994. The European operations, in total, generated significant
operating profit in the first nine-months 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 principally to the impact of the
weaker United States dollar on foreign sourced products sold in the United
States. In addition, as discussed above, operating profit for 1995 increased
$.7 million due to the revised fair market valuation estimates of the 1994 DEA
acquisition with an additional $.5 million of income recorded in other income.
INTEREST EXPENSE. Interest expense totaled $6.7 million in the first nine-
months of 1995 compared to $4.5 million in the first nine-months of 1994. This
increase reflects a $26.3 million increase in average borrowings over the
comparable period in 1994. $13.8 million of the increase resulted from debt
related to the DEA acquisition, and $11.3 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 $0.2 million ($.02 per share) in the first nine-months of 1995, compared to
net loss of $8.9 million ($1.71 per share) in the first nine-months of 1994.
LIQUIDITY AND CAPITAL RESOURCES
Total short-term and long-term debt increased $8.7 million to $101.3 million at
September 30, 1995 as compared to $92.6 million outstanding at December 31,
1994. Approximately $3.0 million of the debt increase is due to the translation
of foreign denominated borrowings at exchange rates that were higher than the
exchange rates in existence at December 31, 1994 or any later borrowing date.
Brown & Sharpe had borrowings of $25.5 million under the lines of credit
compared to total availability at that date of $65.5 million under the lines of
credit including lines of credit for DEA in an amount of $18.8 million. As of
September 30, 1995, there were borrowings of $10.7 million outstanding under the
Company's $25.0 million secured revolving credit facility. Notes payable and
current installments of long term debt at September 30, 1995 includes $12.1
million of Swiss 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 through 1996,
including one-time costs in integrating Roch, Mauser, and DEA, working capital
requirements and
9
<PAGE>
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 $.2 million in the first nine-months of 1995,
reduced by depreciation and other non-cash items, and changes in working
capital, including additional costs related to restructuring, in the third
quarter of 1995 resulted in operations using $3.1 million of cash. In the first
nine-months of 1994, $2.0 million of cash was provided by operations.
In the first nine-months of 1995, capital expenditures were $5.4 million, as
compared with depreciation and amortization of $7.5 million for the same period.
Other investment transactions in 1995 provided $.3 million. Investment
transactions in the 1994 period used cash of $3.2 million, of which capital
expenditures amounted to $2.0 million as compared with depreciation and
amortization of $4.2 million for the same period in 1994.
Cash provided from financing transactions was $5.4 million in the first nine-
months of 1995 compared to $22.3 million provided in the 1994 period.
WORKING CAPITAL. Working capital was $81.9 million at the end of the first
nine-months of 1995 compared to $102.9 million at the end of 1994. The major
reasons for the decrease in working capital in 1995 was due to the
reclassification of the Swiss mortgage notes payable discussed above from long-
term debt to current liabilities and adjustments to the estimates of the fair
values of assets and liabilities acquired in the 1994 DEA acquisition, pursuant
to the purchase accounting for the acquisition. Inventories decreased to $85.6
million at September 30, 1995, a decrease of $3.1 million from the end of 1994,
and accounts receivable decreased to $100.5 million at September 30, 1995, a
decrease of $7.8 million from year end 1994. Working capital was also affected
by decreased borrowings on the lines of credit amounting to $.6 million, net of
foreign exchange fluctuations.
CAPITAL EXPENDITURES. Brown & Sharpe's capital expenditures were approximately
$5.4 million in the first nine-months of 1995 compared to $2.0 million in the
first nine-months 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
$1.1 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.
10
<PAGE>
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
- ------ --------------------------------
A. See Exhibit Index annexed.
B. No Reports on Form 8-K were filed during the quarter ended September
30, 1995.
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)
November 13, 1995
11
<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.
10.61 Indemnity Agreement with Frank T. Curtin dated May 3, 1995.
10.62 Indemnity Agreement with Alfred J. Corso dated May 3, 1995.
10.63 Indemnity Agreement with Enrico Albareto dated October 28, 1994.
10.64 Indemnity Agreement with Alberto de Benedictis dated October 28, 1994.
10.65 Indemnity Agreement with Vincenzo Cannatelli dated October 28, 1994.
11. Computation of Per Share Data for the quarters and nine-months ended
September 30, 1995 and October 1, 1994.
12
<PAGE>
Exhibit 10.61
INDEMNITY AGREEMENT
-------------------
THIS AGREEMENT, made and entered into on and as of this 3rd day of May,
1995, (the "Agreement"), is by and between Brown & Sharpe Manufacturing Company,
a Delaware corporation, (the "Company," which term shall include any one or more
of its subsidiaries where appropriate), and Frank T. Curtin (the "Indemnitee"):
RECITALS
WHEREAS, highly competent persons are becoming more reluctant to serve
publicly-held corporations as directors or in other capacities unless they are
provided with adequate protection through insurance or adequate indemnification
against inordinate risks of claims and actions against them arising out of their
service to and activities on behalf of the corporation; and,
WHEREAS, the current impracticability of obtaining adequate insurance and
the uncertainties relating to indemnification have increased the difficulty of
attracting and retaining such persons; and,
WHEREAS, the Board of Directors of the Company (the "Board") has determined
that the difficulty in attracting and retaining such persons is detrimental to
the best interests of the Company's shareholders and that the Company should act
to assure such persons that there will be increased certainty of such protection
in the future; and,
WHEREAS, it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify such persons to the fullest extent
permitted by applicable law so that they will serve or continue to serve the
Company free from undue concern that they will not be so indemnified; and,
WHEREAS, Indemnitee is willing to serve, continue to serve and/or to take
on additional service for or on behalf of the Company on the condition that he
be so indemnified;
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:
1. Services by Indemnitee. Indemnitee agrees to serve or continue to
----------------------
serve as an officer and a director of the Company. This Agreement shall not
impose any obligation on the Indemnitee or the Company to continue the
Indemnitee's position with the Company beyond any period otherwise applicable.
2. General. The Company shall indemnify and shall advance Expenses (as
-------
hereinafter defined) to Indemnitee as provided in this Agreement and to the
fullest extent permitted by law.
3. Proceedings Other Than Proceedings by or in the Right of the Company.
--------------------------------------------------------------------
Indemnitee shall be entitled to the rights of indemnification provided in this
Section 3 if, by reason of his Corporate Status, (as hereinafter defined), he
is, or is threatened to be made, a party to any threatened, pending, or
completed Proceeding (as hereinafter defined), other than a Proceeding by or in
the right of the Company. Pursuant to this Section 3, Indemnitee shall be
indemnified against expenses, judgments, penalties, fines and amounts paid in
settlement actually and reasonably incurred by him or on his behalf in
connection with such Proceeding or any claim, issue or matter therein, if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company, and, with respect to any criminal
Proceeding, had no reasonable cause to believe his conduct was unlawful.
4. Proceedings by or in the Right of the Company. Indemnitee shall be
---------------------------------------------
entitled to the rights of indemnification provided in this Section 4, if, by
reason of his Corporate Status, he is, or is threatened to
<PAGE>
be made, a party to any threatened, pending or completed Proceeding brought by
or in the right of the Company to procure a judgment in its favor. Pursuant to
this Section, Indemnitee shall be indemnified against Expenses actually and
reasonably incurred by him or on his behalf in connection with such Proceeding
if he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company. Notwithstanding the foregoing, no
indemnification against such Expenses shall be made in respect of any claim,
issue or matter as to which Indemnitee shall have been adjudged to be liable to
the Company if such indemnification is not permitted by Delaware law; provided,
however, that indemnification against Expenses shall nevertheless be made by the
Company in such event to the extent that the Court of Chancery of the State of
Delaware, or the court in which such Proceeding shall have been brought or is
pending, shall determine.
5. Indemnification for Expenses of a Party who is Wholly or Partly
---------------------------------------------------------------
Successful. Notwithstanding any other provision of this Agreement, to the
- ----------
extent that Indemnitee is, by reason of his Corporate Status, a party to and is
successful, on the merits or otherwise, in any Proceeding, he shall be
indemnified against all Expenses actually and reasonably incurred by him or on
his behalf in connection therewith. If Indemnitee is not wholly successful in
such Proceeding but is successful, on the merits or otherwise, as to one or more
but less than all claims, issues or matters in such Proceeding, the Company
shall indemnify Indemnitee against all Expenses actually and reasonably incurred
by him or on his behalf in connection with each successfully resolved claim,
issue or matter. For purposes of this Section and without limitation, the
termination of any claim, issue or matter in such a Proceeding by dismissal or
withdrawal, with or without prejudice, shall be deemed to be a successful result
as to such claim, issue or matter.
6. Advance of Expenses. The Company shall advance all reasonable Expenses
-------------------
incurred by or on behalf of Indemnitee in connection with any Proceeding within
twenty days after the receipt by the Company of a statement or statements from
Indemnitee requesting such advance or advances from time to time, whether prior
to or after final disposition of such Proceeding. Such statement or statements
shall reasonably evidence the Expenses incurred by Indemnitee and shall include
or be preceded or accompanied by an undertaking by or on behalf of Indemnitee to
repay any Expenses advanced if it shall ultimately be determined that Indemnitee
is not entitled to be indemnified against such Expenses.
7. Procedure for Determination of Entitlement to Indemnification.
-------------------------------------------------------------
(a) To obtain indemnification under this Agreement, Indemnitee shall
submit to the Company a written request, including therein or therewith such
documentation and information as is reasonably available to Indemnitee and is
reasonably necessary to determine whether and to what extent Indemnitee is
entitled to indemnification. The Secretary of the Company shall, promptly upon
receipt of such a request for indemnification, advise the Board of Directors in
writing that Indemnitee has requested indemnification.
(b) Upon written request by Indemnitee for indemnification pursuant to
Section 7(a) hereof, a determination, if required by applicable law, with
respect to Indemnitee's entitlement thereto shall be made in the specific case:
(i) if a Change in Control (as hereinafter defined) shall have occurred, by
Independent Counsel (as hereinafter defined) in a written opinion to the Board
of Directors, a copy of which shall be delivered to Indemnitee (unless
Indemnitee shall request that such determination be made by the Board of
Directors or the shareholders, in which case the determination shall be made in
the manner provided below in clauses (ii) or (iii); (ii) if a Change of Control
shall not have occurred, (A) by the Board of Directors by a majority vote of a
quorum consisting of Disinterested Directors (as hereinafter defined), or (B) if
a quorum of the Board of Directors consisting of Disinterested Directors is not
obtainable or, even if obtainable, such quorum of Disinterested Directors so
directs, by Independent Counsel in a written opinion to the Board of Directors,
a copy of which shall be delivered to Indemnitee or (C) by the shareholders of
the Company; or (iii) as provided in Section 8(b) of this Agreement; and, if it
is so determined that Indemnitee is entitled to indemnification, payment to
Indemnitee shall be made within ten (10) days after such determination.
Indemnitee shall cooperate with the person, persons or entity making such
determination with respect to Indemnitee's entitlement to indemnification,
including providing to such person, persons or entity upon reasonable advance
request any documentation or
<PAGE>
information which is not privileged or otherwise protected from disclosure and
which is reasonably available to Indemnitee and reasonably necessary to such
determination. Any costs of expenses (including attorneys' fees and
disbursements) incurred by Indemnitee in so cooperating shall be borne by the
Company (irrespective of the determination), and the Company hereby indemnifies
and agrees to hold Indemnitee harmless therefrom.
(c) In the event the determination of entitlement to indemnification is to
be made by Independent Counsel pursuant to Section 7(b) of this Agreement, the
Independent Counsel shall be selected as provided in this Section 7(c). If a
Change of Control shall not have occurred, the Independent Counsel shall be
selected by the Board of Directors, and the Company shall give written notice to
Indemnitee advising him of the identity of the Independent Counsel so selected.
If a Change of Control shall have occurred, the Independent Counsel shall be
selected by Indemnitee (unless Indemnitee shall request that such selection be
made by the Board of Directors, in which event the preceding sentence shall
apply), and Indemnitee shall give written notice to the Company advising it of
the identity of the Independent Counsel so selected. In either event,
Indemnitee or the Company, as the case may be, may within 7 days after such
written notice of selection shall have been given, deliver to the Company or to
Indemnitee, as the case may be, a written objection to such selection. Such
objection may be asserted only on the ground that the Independent Counsel so
selected does not meet the requirements of "Independent Counsel" as defined in
Section 13 of this Agreement, and the objection shall set forth with
particularity the factual basis of such assertion. If such written objection is
made, the Independent Counsel so selected may not serve as Independent Counsel
unless and until a court has determined that such objection is without merit.
If, within 20 days after submission by Indemnitee of a written request for
indemnification pursuant to Section 7(a) hereof, no Independent Counsel shall
have been selected or if selected, shall have been objected to, in accordance
with this Section 7(c), either the Company or Indemnitee may petition the Court
of Chancery of the State of Delaware or other court of competent jurisdiction
for resolution of any objection which shall have been made by the Company or
Indemnitee to the other's selection of Independent Counsel and/or for the
appointment as Independent Counsel of a person selected by the Court or by such
other person as the Court shall designate, and the person with respect to whom
an objection is favorably resolved or the person so appointed shall act as
Independent Counsel under Section 7(b) hereof. The Company shall pay any and
all reasonable fees and expenses of Independent Counsel incurred by such
Independent Counsel in connection with acting pursuant to Section 7(b) hereof,
and the Company shall pay all reasonable fees and expenses incident to the
procedures of this Section 7(c), regardless of the manner in which such
Independent Counsel was selected or appointed. Upon the due commencement of any
judicial proceeding or arbitration pursuant to Section 9(a)(iii) of this
Agreement, Independent Counsel shall be discharged and relieved of any further
responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).
8. Presumptions and Effect of Certain Proceedings.
----------------------------------------------
(a) If a Change of Control shall have occurred in making a determination
with respect to entitlement to indemnification hereunder, the person, persons or
entity making such determination shall presume that Indemnitee is entitled to
indemnification under this Agreement if Indemnitee has submitted a request for
indemnification in accordance with Section 7(a) of this Agreement, and the
Company shall have the burden of proof to overcome that presumption in
connection with the making by any person, persons or entity of any determination
contrary to that presumption.
(b) If the person, persons or entity empowered or selected under Section 7
of this Agreement to determine whether Indemnitee is entitled to indemnification
shall not have made such determination within 60 days after receipt by the
Company of the request therefor, the requisite determination of entitlement to
indemnification shall be deemed to have been made, and Indemnitee shall be
entitled to such indemnification, absent (i) a misstatement by Indemnitee of a
material fact, or an omission of a material fact necessary to make Indemnitee's
statement not materially misleading, in connection with the request for
indemnification, or (ii) a prohibition of such indemnification under applicable
law; provided, however, that such 60-day period may be extended for a reasonable
time, not to exceed an additional 30 days, if the person, persons or entity
making the determination with respect to entitlement to
<PAGE>
indemnification in good faith requires such additional time for the obtaining or
evaluating of documentation and/or information relating thereto; and provided,
further, that the foregoing provisions of this Section 8(b) shall not apply (i)
if the determination of entitlement to indemnification is to be made by the
shareholders pursuant to Section 7(b) of this Agreement and if (A) within 15
days after receipt by the Company of the request for such determination the
Board of Directors has resolved to submit such determination to the shareholders
for their consideration at an annual meeting thereof to be held within 75 days
after such receipt and such determination is made thereat, (B) a special meeting
of shareholders is called within 15 days after such receipt for the purpose of
making such determination, such meeting is held for such purpose within 60 days
after having been so called and such determination is made thereat, or (ii) if
the determination of entitlement to indemnification is to be made by Independent
Counsel pursuant to Section 7(b) of this Agreement.
(c) The termination of any Proceeding or of any claim, issue or matter
therein by judgment, order, settlement or conviction, or upon a plea of nolo
----
contendere or its equivalent, shall not (except as otherwise expressly provided
- ----------
in this Agreement) of itself adversely affect the right of Indemnitee to
indemnification or create a presumption that Indemnitee did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the Company or, with respect to any criminal Proceeding,
that Indemnitee had reasonable cause to believe that his conduct was unlawful.
9. Remedies of Indemnitee.
----------------------
(a) In the event that (i) a determination is made pursuant to Section 7 of
this Agreement that Indemnitee is not entitled to indemnification under this
Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 6
of this Agreement, (iii) the determination of entitlement to indemnification is
to be made by Independent Counsel pursuant to Section 7(b) of this Agreement and
such determination shall not have been made and delivered in a written opinion
within 90 days after receipt by the Company of the request for indemnification,
(iv) payment of indemnification is not made pursuant to Section 5 of this
Agreement within ten (10) days after receipt by the Company of a written request
therefor, or (v) payment of indemnification is not made within ten (10) days
after a determination has been made that Indemnitee is entitled to
indemnification or such determination is deemed to have been made pursuant to
Section 8 of this Agreement, Indemnitee shall be entitled to an adjudication in
an appropriate court of the State of Delaware, or in any other court of
competent jurisdiction, of his entitlement to such indemnification or
advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an
award in arbitration to be conducted by a single arbitrator pursuant to the
rules of the American Arbitration Association. Indemnitee shall commence such
proceeding seeking an adjudication or an award in arbitration within 180 days
following the date on which Indemnitee first has the right to commence such
proceeding pursuant to this Section 9(a). The Company shall not oppose
Indemnitee's right to seek any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made pursuant to
Section 7 of this Agreement that Indemnitee is not entitled to indemnification,
any judicial proceeding or arbitration commenced pursuant to this Section 9
shall be conducted in all respects as a de novo trial, or arbitration, on the
-- ----
merits and Indemnitee shall not be prejudiced by reason of that adverse
determination. If a Change of Control shall have occurred, in any judicial
proceeding or arbitration commenced pursuant to this Section 9, the Company
shall have the burden of proving that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be.
(c) If a determination shall have been made or deemed to have been made
pursuant to Section 7 or 8 of this Agreement that Indemnitee is entitled to
indemnification, the Company shall be bound by such determination in any
judicial proceeding or arbitration commenced pursuant to this Section 9, absent
(i) a misstatement by Indemnitee of a material fact, or an omission of a
material fact necessary to make Indemnitee's statement not materially
misleading, in connection with the request for indemnification, or (ii) a
prohibition of such indemnification under applicable law.
(d) The Company shall be precluded from asserting in any judicial
proceedings or arbitration commenced pursuant to this Section 9 that the
procedures and presumptions of this Agreement are not
<PAGE>
valid, binding and enforceable and shall stipulate in any such court or before
any such arbitrator that the Company is bound by all the provisions of this
Agreement.
(e) In the event that Indemnitee, pursuant to this Section 9, seeks a
judicial adjudication of or an award in arbitration to enforce his rights under,
or to recover damages for breach of, this Agreement, Indemnitee shall be
entitled to recover from the Company, and shall be indemnified by the Company
against, any and all expenses (of the types described in the definition of
Expenses in Section 13 of this Agreement) actually and reasonably incurred by
him in such judicial adjudication or arbitration, but only if he prevails
therein. If it shall be determined in said judicial adjudication or arbitration
that Indemnitee is entitled to receive part but not all of the indemnification
or advancement of expenses sought, the expenses incurred by Indemnitee in
connection with such judicial adjudication or arbitration shall be appropriately
prorated.
10. Security. To the extent requested by the Indemnitee and approved by
--------
the Board, the Company may at any time and from time to time provide security to
the Indemnitee for the Company's obligations hereunder through an irrevocable
bank line of credit, funded trust, or other collateral. Any such security, once
provided to the Indemnitee, may not be revoked or released without the prior
written consent of Indemnitee.
11. Non-Exclusivity; Duration of Agreement, Insurance; Subrogation.
--------------------------------------------------------------
(a) The rights of indemnification and to receive advancement of Expenses
as provided by this Agreement shall not be deemed exclusive of any other rights
to which Indemnitee may at any time be entitled under applicable law, the
Company's certificate of incorporation or by-laws, any other agreement, a vote
of shareholders or a resolution of directors, or otherwise. This Agreement
shall continue until and terminate upon the later of: (a) 10 years after the
date that Indemnitee shall have ceased to serve as a director or officer of the
Company or fiduciary of any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise on which Indemnitee served at
the request of the Company; or (b) the final termination of all pending
Proceedings in respect of which Indemnitee is granted rights of indemnification
or advancement of expenses hereunder and of any proceeding commenced by
Indemnitee pursuant to Section 9 of this Agreement relating thereto. This
Agreement shall be binding upon the Company and its successors and assigns and
shall inure to the benefit of Indemnitee and his heirs, executors and
administrators.
(b) To the extent that the Company maintains an insurance policy or
policies providing liability insurance for directors and officers of the Company
or fiduciaries of any other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise which such person serves at the
request of the Company, Indemnitee shall be covered by such policy or policies
in accordance with its or their terms to the maximum extent of the coverage
available for any such director or officer under such policy or policies.
(c) In the event of any payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee who shall execute all papers required and take all action necessary
to secure such rights including execution of such documents as are necessary to
enable the Company to bring suit to enforce such rights.
(d) The Company shall not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable hereunder if and to the extent that
Indemnitee has otherwise actually received such payment under any insurance
policy, contract, agreement or otherwise.
12. Severability. If any provision or provisions of this Agreement shall
------------
be held to be invalid, illegal or unenforceable for any reason whatsoever: (a)
the validity, legality and enforceability of the remaining provisions of this
Agreement (including, without limitation, each portion of any Section of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall not
in any way be affected or impaired thereby; and (b) to the fullest extent
possible, the provisions of this Agreement (including, without limitation, each
portion of any
<PAGE>
Section of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that is not itself invalid, illegal or unenforceable)
shall be construed so as to give effect to the intent manifested by the
provision held invalid, illegal or unenforceable.
13. Exception to Right of Indemnification or Advancement of Expenses.
----------------------------------------------------------------
Notwithstanding any other provision of this Agreement, Indemnitee shall not be
entitled to indemnification or advancement of Expenses under this Agreement with
respect to any Proceeding, or any claim therein, brought or made by him against
the Company.
14. Definitions. For purposes of this Agreement:
-----------
(a) "Change in Control" means a change in control of the Company of a
nature that would be required to be reported in response to Item 5(f) of
Schedule 14A of Regulation 14A (or in response to any similar item on any
similar schedule or form) promulgated under the Securities Exchange Act of 1934
(the "Act"), whether or not the Company is then subject to such reporting
requirement; provided, however, that, without limitation, such a Change in
Control shall be deemed to have occurred if (i) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Act), directly or indirectly, of
securities of the Company representing 20% or more of the combined voting power
of the Company's then outstanding securities without the prior approval of at
least two-thirds of the members of the Board of Directors in office immediately
prior to such person attaining such percentage interest; (ii) the Company is a
party to a merger, consolidation, sale of assets or other reorganization, or a
proxy contest, as a consequence of which members of the Board of Directors in
office immediately prior to such transaction or event constitute less than a
majority of the Board of Directors thereafter; or (iii) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Board of Directors (including for this purpose any new director whose
election or nomination for election by the Company's shareholders was approved
by a vote of at least two-thirds of the directors then still in office who were
directors at the beginning of such period) cease for any reason to constitute at
least a majority of the Board of Directors.
(b) "Corporate Status" describes the status of a person who is or was or
has agreed to become a director of the Company, or is or was an officer or
fiduciary of the Company or of any other corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise which such person is
or was serving at the request of the Company.
(c) "Disinterested Directors" means a director of the Company who is not
and was not a party to the Proceeding in respect of which indemnification is
sought by Indemnitee.
(d) "Expenses" shall include all reasonable attorneys' fees, retainers,
court costs, transcript costs, fees of experts, travel expenses, duplicating
costs, printing and binding costs, telephone charges, postage, delivery service
fees, and all other disbursements or expenses of the types customarily incurred
in connection with prosecuting, defending, preparing to prosecute or defend or
investigating a Proceeding.
(e) "Independent Counsel" means a law firm, or a member of a law firm,
that is experienced in matters of corporation law and neither presently is, nor
in the past five years has been, retained to represent: (i) the Company or
Indemnitee in any matter material to either such party, or (ii) any other party
to the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term "Independent Counsel" shall not include
any person who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the Company
or Indemnitee in an action to determine Indemnitee's rights under this
Agreement.
(f) "Proceeding" includes any action, suit, arbitration, alternate dispute
resolution mechanism, investigation, administrative hearing or any other
proceeding, whether civil, criminal, administrative or investigative, arising on
or after the date of this Agreement (and regardless of when the Indemnitee's act
<PAGE>
or failure to act occurred), except one initiated by an Indemnitee pursuant to
Section 9 of this Agreement to enforce his rights under this Agreement.
15. Headings. The headings of the paragraphs of this Agreement are
--------
inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.
16. Modification and Waiver. This Agreement may be amended from time to
-----------------------
time to reflect changes in Delaware law or for other reasons. No supplement,
modification or amendment of this Agreement shall be binding unless executed in
writing by both of the parties hereto. No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (whether or not similar) nor shall such waiver constitute a
continuing waiver.
17. Notice by Indemnitee. Indemnitee agrees promptly to notify the
--------------------
Company in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to any Proceeding
or matter which may be subject to indemnification or advancement of Expenses
covered hereunder, provided, however, that the failure to give any such notice
shall not disqualify the Indemnitee from indemnification hereunder.
18. Notices. All notices, requests, demands and other communications
-------
hereunder shall be in writing and shall be deemed to have been duly given if (i)
delivered by hand and receipted for by the party to whom said notice or other
communication shall have been directed, or (ii) mailed by certified or
registered mail with postage prepaid, on the third business day after the date
on which it is so mailed:
(a) If to Indemnitee, to:
Frank T. Curtin
56 Main Street
Wickford, RI 02852
(b) If to the Company, to:
Secretary
Brown & Sharpe Manufacturing Company
Precision Park
200 Frenchtown Road
North Kingstown, RI 02852-1700
or to such other address as may have been furnished to Indemnitee by the Company
or to the Company by Indemnitee, as the case may be.
19. Governing Law. The parties agree that this Agreement shall be
-------------
governed by and construed and enforced in accordance with the laws of the State
of Delaware.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and
as of the day and year first above written.
Attest: Brown & Sharpe Manufacturing Company
By: _________________ By: _________________________
Secretary Henry D. Sharpe, Jr.
Chairman of the Board
Indemnitee
______________________________
Frank T. Curtin
<PAGE>
Exhibit 10.62
INDEMNITY AGREEMENT
-------------------
THIS AGREEMENT, made and entered into on and as of this 3rd day of May,
1995, (the "Agreement"), is by and between Brown & Sharpe Manufacturing Company,
a Delaware corporation, (the "Company," which term shall include any one or more
of its subsidiaries where appropriate), and Alfred J. Corso (the "Indemnitee"):
RECITALS
WHEREAS, highly competent persons are becoming more reluctant to serve
publicly-held corporations as directors or in other capacities unless they are
provided with adequate protection through insurance or adequate indemnification
against inordinate risks of claims and actions against them arising out of their
service to and activities on behalf of the corporation; and,
WHEREAS, the current impracticability of obtaining adequate insurance and
the uncertainties relating to indemnification have increased the difficulty of
attracting and retaining such persons; and,
WHEREAS, the Board of Directors of the Company (the "Board") has determined
that the difficulty in attracting and retaining such persons is detrimental to
the best interests of the Company's shareholders and that the Company should act
to assure such persons that there will be increased certainty of such protection
in the future; and,
WHEREAS, it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify such persons to the fullest extent
permitted by applicable law so that they will serve or continue to serve the
Company free from undue concern that they will not be so indemnified; and,
WHEREAS, Indemnitee is willing to serve, continue to serve and/or to take
on additional service for or on behalf of the Company on the condition that he
be so indemnified;
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:
1. Services by Indemnitee. Indemnitee agrees to serve or continue to
----------------------
serve as an officer of the Company. This Agreement shall not impose any
obligation on the Indemnitee or the Company to continue the Indemnitee's
position with the Company beyond any period otherwise applicable.
2. General. The Company shall indemnify and shall advance Expenses (as
-------
hereinafter defined) to Indemnitee as provided in this Agreement and to the
fullest extent permitted by law.
3. Proceedings Other Than Proceedings by or in the Right of the Company.
--------------------------------------------------------------------
Indemnitee shall be entitled to the rights of indemnification provided in this
Section 3 if, by reason of his Corporate Status, (as hereinafter defined), he
is, or is threatened to be made, a party to any threatened, pending, or
completed Proceeding (as hereinafter defined), other than a Proceeding by or in
the right of the Company. Pursuant to this Section 3, Indemnitee shall be
indemnified against expenses, judgments, penalties, fines and amounts paid in
settlement actually and reasonably incurred by him or on his behalf in
connection with such Proceeding or any claim, issue or matter therein, if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company, and, with respect to any criminal
Proceeding, had no reasonable cause to believe his conduct was unlawful.
4. Proceedings by or in the Right of the Company. Indemnitee shall be
---------------------------------------------
entitled to the rights of indemnification provided in this Section 4, if, by
reason of his Corporate Status, he is, or is threatened to be made, a party to
any threatened, pending or completed Proceeding brought by or in the right of
the
<PAGE>
Company to procure a judgment in its favor. Pursuant to this Section, Indemnitee
shall be indemnified against Expenses actually and reasonably incurred by him or
on his behalf in connection with such Proceeding if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best interests
of the Company. Notwithstanding the foregoing, no indemnification against such
Expenses shall be made in respect of any claim, issue or matter as to which
Indemnitee shall have been adjudged to be liable to the Company if such
indemnification is not permitted by Delaware law; provided, however, that
indemnification against Expenses shall nevertheless be made by the Company in
such event to the extent that the Court of Chancery of the State of Delaware, or
the court in which such Proceeding shall have been brought or is pending, shall
determine.
5. Indemnification for Expenses of a Party who is Wholly or Partly
---------------------------------------------------------------
Successful. Notwithstanding any other provision of this Agreement, to the
- ----------
extent that Indemnitee is, by reason of his Corporate Status, a party to and is
successful, on the merits or otherwise, in any Proceeding, he shall be
indemnified against all Expenses actually and reasonably incurred by him or on
his behalf in connection therewith. If Indemnitee is not wholly successful in
such Proceeding but is successful, on the merits or otherwise, as to one or more
but less than all claims, issues or matters in such Proceeding, the Company
shall indemnify Indemnitee against all Expenses actually and reasonably incurred
by him or on his behalf in connection with each successfully resolved claim,
issue or matter. For purposes of this Section and without limitation, the
termination of any claim, issue or matter in such a Proceeding by dismissal or
withdrawal, with or without prejudice, shall be deemed to be a successful result
as to such claim, issue or matter.
6. Advance of Expenses. The Company shall advance all reasonable Expenses
-------------------
incurred by or on behalf of Indemnitee in connection with any Proceeding within
twenty days after the receipt by the Company of a statement or statements from
Indemnitee requesting such advance or advances from time to time, whether prior
to or after final disposition of such Proceeding. Such statement or statements
shall reasonably evidence the Expenses incurred by Indemnitee and shall include
or be preceded or accompanied by an undertaking by or on behalf of Indemnitee to
repay any Expenses advanced if it shall ultimately be determined that Indemnitee
is not entitled to be indemnified against such Expenses.
7. Procedure for Determination of Entitlement to Indemnification.
-------------------------------------------------------------
(a) To obtain indemnification under this Agreement, Indemnitee shall
submit to the Company a written request, including therein or therewith such
documentation and information as is reasonably available to Indemnitee and is
reasonably necessary to determine whether and to what extent Indemnitee is
entitled to indemnification. The Secretary of the Company shall, promptly upon
receipt of such a request for indemnification, advise the Board of Directors in
writing that Indemnitee has requested indemnification.
(b) Upon written request by Indemnitee for indemnification pursuant to
Section 7(a) hereof, a determination, if required by applicable law, with
respect to Indemnitee's entitlement thereto shall be made in the specific case:
(i) if a Change in Control (as hereinafter defined) shall have occurred, by
Independent Counsel (as hereinafter defined) in a written opinion to the Board
of Directors, a copy of which shall be delivered to Indemnitee (unless
Indemnitee shall request that such determination be made by the Board of
Directors or the shareholders, in which case the determination shall be made in
the manner provided below in clauses (ii) or (iii); (ii) if a Change of Control
shall not have occurred, (A) by the Board of Directors by a majority vote of a
quorum consisting of Disinterested Directors (as hereinafter defined), or (B) if
a quorum of the Board of Directors consisting of Disinterested Directors is not
obtainable or, even if obtainable, such quorum of Disinterested Directors so
directs, by Independent Counsel in a written opinion to the Board of Directors,
a copy of which shall be delivered to Indemnitee or (C) by the shareholders of
the Company; or (iii) as provided in Section 8(b) of this Agreement; and, if it
is so determined that Indemnitee is entitled to indemnification, payment to
Indemnitee shall be made within ten (10) days after such determination.
Indemnitee shall cooperate with the person, persons or entity making such
determination with respect to Indemnitee's entitlement to indemnification,
including providing to such person, persons or entity upon reasonable advance
request any documentation or information which is not privileged or otherwise
protected from disclosure and which is reasonably
<PAGE>
available to Indemnitee and reasonably necessary to such determination. Any
costs of expenses (including attorneys' fees and disbursements) incurred by
Indemnitee in so cooperating shall be borne by the Company (irrespective of the
determination), and the Company hereby indemnifies and agrees to hold Indemnitee
harmless therefrom.
(c) In the event the determination of entitlement to indemnification is to
be made by Independent Counsel pursuant to Section 7(b) of this Agreement, the
Independent Counsel shall be selected as provided in this Section 7(c). If a
Change of Control shall not have occurred, the Independent Counsel shall be
selected by the Board of Directors, and the Company shall give written notice to
Indemnitee advising him of the identity of the Independent Counsel so selected.
If a Change of Control shall have occurred, the Independent Counsel shall be
selected by Indemnitee (unless Indemnitee shall request that such selection be
made by the Board of Directors, in which event the preceding sentence shall
apply), and Indemnitee shall give written notice to the Company advising it of
the identity of the Independent Counsel so selected. In either event,
Indemnitee or the Company, as the case may be, may within 7 days after such
written notice of selection shall have been given, deliver to the Company or to
Indemnitee, as the case may be, a written objection to such selection. Such
objection may be asserted only on the ground that the Independent Counsel so
selected does not meet the requirements of "Independent Counsel" as defined in
Section 13 of this Agreement, and the objection shall set forth with
particularity the factual basis of such assertion. If such written objection is
made, the Independent Counsel so selected may not serve as Independent Counsel
unless and until a court has determined that such objection is without merit.
If, within 20 days after submission by Indemnitee of a written request for
indemnification pursuant to Section 7(a) hereof, no Independent Counsel shall
have been selected or if selected, shall have been objected to, in accordance
with this Section 7(c), either the Company or Indemnitee may petition the Court
of Chancery of the State of Delaware or other court of competent jurisdiction
for resolution of any objection which shall have been made by the Company or
Indemnitee to the other's selection of Independent Counsel and/or for the
appointment as Independent Counsel of a person selected by the Court or by such
other person as the Court shall designate, and the person with respect to whom
an objection is favorably resolved or the person so appointed shall act as
Independent Counsel under Section 7(b) hereof. The Company shall pay any and
all reasonable fees and expenses of Independent Counsel incurred by such
Independent Counsel in connection with acting pursuant to Section 7(b) hereof,
and the Company shall pay all reasonable fees and expenses incident to the
procedures of this Section 7(c), regardless of the manner in which such
Independent Counsel was selected or appointed. Upon the due commencement of any
judicial proceeding or arbitration pursuant to Section 9(a)(iii) of this
Agreement, Independent Counsel shall be discharged and relieved of any further
responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).
8. Presumptions and Effect of Certain Proceedings.
----------------------------------------------
(a) If a Change of Control shall have occurred in making a determination
with respect to entitlement to indemnification hereunder, the person, persons or
entity making such determination shall presume that Indemnitee is entitled to
indemnification under this Agreement if Indemnitee has submitted a request for
indemnification in accordance with Section 7(a) of this Agreement, and the
Company shall have the burden of proof to overcome that presumption in
connection with the making by any person, persons or entity of any determination
contrary to that presumption.
(b) If the person, persons or entity empowered or selected under Section 7
of this Agreement to determine whether Indemnitee is entitled to indemnification
shall not have made such determination within 60 days after receipt by the
Company of the request therefor, the requisite determination of entitlement to
indemnification shall be deemed to have been made, and Indemnitee shall be
entitled to such indemnification, absent (i) a misstatement by Indemnitee of a
material fact, or an omission of a material fact necessary to make Indemnitee's
statement not materially misleading, in connection with the request for
indemnification, or (ii) a prohibition of such indemnification under applicable
law; provided, however, that such 60-day period may be extended for a reasonable
time, not to exceed an additional 30 days, if the person, persons or entity
making the determination with respect to entitlement to indemnification in good
faith requires such additional time for the obtaining or evaluating of
<PAGE>
documentation and/or information relating thereto; and provided, further, that
the foregoing provisions of this Section 8(b) shall not apply (i) if the
determination of entitlement to indemnification is to be made by the
shareholders pursuant to Section 7(b) of this Agreement and if (A) within 15
days after receipt by the Company of the request for such determination the
Board of Directors has resolved to submit such determination to the shareholders
for their consideration at an annual meeting thereof to be held within 75 days
after such receipt and such determination is made thereat, (B) a special meeting
of shareholders is called within 15 days after such receipt for the purpose of
making such determination, such meeting is held for such purpose within 60 days
after having been so called and such determination is made thereat, or (ii) if
the determination of entitlement to indemnification is to be made by Independent
Counsel pursuant to Section 7(b) of this Agreement.
(c) The termination of any Proceeding or of any claim, issue or matter
therein by judgment, order, settlement or conviction, or upon a plea of nolo
----
contendere or its equivalent, shall not (except as otherwise expressly provided
- ----------
in this Agreement) of itself adversely affect the right of Indemnitee to
indemnification or create a presumption that Indemnitee did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the Company or, with respect to any criminal Proceeding,
that Indemnitee had reasonable cause to believe that his conduct was unlawful.
9. Remedies of Indemnitee.
----------------------
(a) In the event that (i) a determination is made pursuant to Section 7 of
this Agreement that Indemnitee is not entitled to indemnification under this
Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 6
of this Agreement, (iii) the determination of entitlement to indemnification is
to be made by Independent Counsel pursuant to Section 7(b) of this Agreement and
such determination shall not have been made and delivered in a written opinion
within 90 days after receipt by the Company of the request for indemnification,
(iv) payment of indemnification is not made pursuant to Section 5 of this
Agreement within ten (10) days after receipt by the Company of a written request
therefor, or (v) payment of indemnification is not made within ten (10) days
after a determination has been made that Indemnitee is entitled to
indemnification or such determination is deemed to have been made pursuant to
Section 8 of this Agreement, Indemnitee shall be entitled to an adjudication in
an appropriate court of the State of Delaware, or in any other court of
competent jurisdiction, of his entitlement to such indemnification or
advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an
award in arbitration to be conducted by a single arbitrator pursuant to the
rules of the American Arbitration Association. Indemnitee shall commence such
proceeding seeking an adjudication or an award in arbitration within 180 days
following the date on which Indemnitee first has the right to commence such
proceeding pursuant to this Section 9(a). The Company shall not oppose
Indemnitee's right to seek any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made pursuant to
Section 7 of this Agreement that Indemnitee is not entitled to indemnification,
any judicial proceeding or arbitration commenced pursuant to this Section 9
shall be conducted in all respects as a de novo trial, or arbitration, on the
-- ----
merits and Indemnitee shall not be prejudiced by reason of that adverse
determination. If a Change of Control shall have occurred, in any judicial
proceeding or arbitration commenced pursuant to this Section 9, the Company
shall have the burden of proving that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be.
(c) If a determination shall have been made or deemed to have been made
pursuant to Section 7 or 8 of this Agreement that Indemnitee is entitled to
indemnification, the Company shall be bound by such determination in any
judicial proceeding or arbitration commenced pursuant to this Section 9, absent
(i) a misstatement by Indemnitee of a material fact, or an omission of a
material fact necessary to make Indemnitee's statement not materially
misleading, in connection with the request for indemnification, or (ii) a
prohibition of such indemnification under applicable law.
(d) The Company shall be precluded from asserting in any judicial
proceedings or arbitration commenced pursuant to this Section 9 that the
procedures and presumptions of this Agreement are not
<PAGE>
valid, binding and enforceable and shall stipulate in any such court or before
any such arbitrator that the Company is bound by all the provisions of this
Agreement.
(e) In the event that Indemnitee, pursuant to this Section 9, seeks a
judicial adjudication of or an award in arbitration to enforce his rights under,
or to recover damages for breach of, this Agreement, Indemnitee shall be
entitled to recover from the Company, and shall be indemnified by the Company
against, any and all expenses (of the types described in the definition of
Expenses in Section 13 of this Agreement) actually and reasonably incurred by
him in such judicial adjudication or arbitration, but only if he prevails
therein. If it shall be determined in said judicial adjudication or arbitration
that Indemnitee is entitled to receive part but not all of the indemnification
or advancement of expenses sought, the expenses incurred by Indemnitee in
connection with such judicial adjudication or arbitration shall be appropriately
prorated.
10. Security. To the extent requested by the Indemnitee and approved by
--------
the Board, the Company may at any time and from time to time provide security to
the Indemnitee for the Company's obligations hereunder through an irrevocable
bank line of credit, funded trust, or other collateral. Any such security, once
provided to the Indemnitee, may not be revoked or released without the prior
written consent of Indemnitee.
11. Non-Exclusivity; Duration of Agreement, Insurance; Subrogation.
--------------------------------------------------------------
(a) The rights of indemnification and to receive advancement of Expenses
as provided by this Agreement shall not be deemed exclusive of any other rights
to which Indemnitee may at any time be entitled under applicable law, the
Company's certificate of incorporation or by-laws, any other agreement, a vote
of shareholders or a resolution of directors, or otherwise. This Agreement
shall continue until and terminate upon the later of: (a) 10 years after the
date that Indemnitee shall have ceased to serve as a director or officer of the
Company or fiduciary of any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise on which Indemnitee served at
the request of the Company; or (b) the final termination of all pending
Proceedings in respect of which Indemnitee is granted rights of indemnification
or advancement of expenses hereunder and of any proceeding commenced by
Indemnitee pursuant to Section 9 of this Agreement relating thereto. This
Agreement shall be binding upon the Company and its successors and assigns and
shall inure to the benefit of Indemnitee and his heirs, executors and
administrators.
(b) To the extent that the Company maintains an insurance policy or
policies providing liability insurance for directors and officers of the Company
or fiduciaries of any other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise which such person serves at the
request of the Company, Indemnitee shall be covered by such policy or policies
in accordance with its or their terms to the maximum extent of the coverage
available for any such director or officer under such policy or policies.
(c) In the event of any payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee who shall execute all papers required and take all action necessary
to secure such rights including execution of such documents as are necessary to
enable the Company to bring suit to enforce such rights.
(d) The Company shall not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable hereunder if and to the extent that
Indemnitee has otherwise actually received such payment under any insurance
policy, contract, agreement or otherwise.
12. Severability. If any provision or provisions of this Agreement shall
------------
be held to be invalid, illegal or unenforceable for any reason whatsoever: (a)
the validity, legality and enforceability of the remaining provisions of this
Agreement (including, without limitation, each portion of any Section of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall not
in any way be affected or impaired thereby; and (b) to the fullest extent
possible, the provisions of this Agreement (including, without limitation, each
portion of any
<PAGE>
Section of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that is not itself invalid, illegal or unenforceable)
shall be construed so as to give effect to the intent manifested by the
provision held invalid, illegal or unenforceable.
13. Exception to Right of Indemnification or Advancement of Expenses.
----------------------------------------------------------------
Notwithstanding any other provision of this Agreement, Indemnitee shall not be
entitled to indemnification or advancement of Expenses under this Agreement with
respect to any Proceeding, or any claim therein, brought or made by him against
the Company.
14. Definitions. For purposes of this Agreement:
-----------
(a) "Change in Control" means a change in control of the Company of a
nature that would be required to be reported in response to Item 5(f) of
Schedule 14A of Regulation 14A (or in response to any similar item on any
similar schedule or form) promulgated under the Securities Exchange Act of 1934
(the "Act"), whether or not the Company is then subject to such reporting
requirement; provided, however, that, without limitation, such a Change in
Control shall be deemed to have occurred if (i) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Act), directly or indirectly, of
securities of the Company representing 20% or more of the combined voting power
of the Company's then outstanding securities without the prior approval of at
least two-thirds of the members of the Board of Directors in office immediately
prior to such person attaining such percentage interest; (ii) the Company is a
party to a merger, consolidation, sale of assets or other reorganization, or a
proxy contest, as a consequence of which members of the Board of Directors in
office immediately prior to such transaction or event constitute less than a
majority of the Board of Directors thereafter; or (iii) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Board of Directors (including for this purpose any new director whose
election or nomination for election by the Company's shareholders was approved
by a vote of at least two-thirds of the directors then still in office who were
directors at the beginning of such period) cease for any reason to constitute at
least a majority of the Board of Directors.
(b) "Corporate Status" describes the status of a person who is or was or
has agreed to become a director of the Company, or is or was an officer or
fiduciary of the Company or of any other corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise which such person is
or was serving at the request of the Company.
(c) "Disinterested Directors" means a director of the Company who is not
and was not a party to the Proceeding in respect of which indemnification is
sought by Indemnitee.
(d) "Expenses" shall include all reasonable attorneys' fees, retainers,
court costs, transcript costs, fees of experts, travel expenses, duplicating
costs, printing and binding costs, telephone charges, postage, delivery service
fees, and all other disbursements or expenses of the types customarily incurred
in connection with prosecuting, defending, preparing to prosecute or defend or
investigating a Proceeding.
(e) "Independent Counsel" means a law firm, or a member of a law firm,
that is experienced in matters of corporation law and neither presently is, nor
in the past five years has been, retained to represent: (i) the Company or
Indemnitee in any matter material to either such party, or (ii) any other party
to the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term "Independent Counsel" shall not include
any person who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the Company
or Indemnitee in an action to determine Indemnitee's rights under this
Agreement.
(f) "Proceeding" includes any action, suit, arbitration, alternate dispute
resolution mechanism, investigation, administrative hearing or any other
proceeding, whether civil, criminal, administrative or investigative, arising on
or after the date of this Agreement (and regardless of when the Indemnitee's act
<PAGE>
or failure to act occurred), except one initiated by an Indemnitee pursuant to
Section 9 of this Agreement to enforce his rights under this Agreement.
15. Headings. The headings of the paragraphs of this Agreement are
--------
inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.
16. Modification and Waiver. This Agreement may be amended from time to
-----------------------
time to reflect changes in Delaware law or for other reasons. No supplement,
modification or amendment of this Agreement shall be binding unless executed in
writing by both of the parties hereto. No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (whether or not similar) nor shall such waiver constitute a
continuing waiver.
17. Notice by Indemnitee. Indemnitee agrees promptly to notify the
--------------------
Company in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to any Proceeding
or matter which may be subject to indemnification or advancement of Expenses
covered hereunder, provided, however, that the failure to give any such notice
shall not disqualify the Indemnitee from indemnification hereunder.
18. Notices. All notices, requests, demands and other communications
-------
hereunder shall be in writing and shall be deemed to have been duly given if (i)
delivered by hand and receipted for by the party to whom said notice or other
communication shall have been directed, or (ii) mailed by certified or
registered mail with postage prepaid, on the third business day after the date
on which it is so mailed:
(a) If to Indemnitee, to:
Alfred J. Corso
6 Lewis Street
Barrington, RI 02816
(b) If to the Company, to:
Secretary
Brown & Sharpe Manufacturing Company
Precision Park
200 Frenchtown Road
North Kingstown, RI 02852-1700
or to such other address as may have been furnished to Indemnitee by the Company
or to the Company by Indemnitee, as the case may be.
19. Governing Law. The parties agree that this Agreement shall be
-------------
governed by and construed and enforced in accordance with the laws of the State
of Delaware.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and
as of the day and year first above written.
Attest: Brown & Sharpe Manufacturing Company
By: _______________________ By: _______________________
Secretary Henry D. Sharpe, Jr.
Chairman of the Board
Indemnitee
___________________________
Alfred J. Corso
<PAGE>
Exhibit 10.63
INDEMNITY AGREEMENT
-------------------
THIS AGREEMENT, made and entered into on and as of this 28th day of
October, 1994, (the "Agreement"), is by and between Brown & Sharpe Manufacturing
Company, a Delaware corporation, (the "Company," which term shall include any
one or more of its subsidiaries where appropriate), and Enrico Albareto (the
"Indemnitee"):
RECITALS
WHEREAS, highly competent persons are becoming more reluctant to serve
publicly-held corporations as directors or in other capacities unless they are
provided with adequate protection through insurance or adequate indemnification
against inordinate risks of claims and actions against them arising out of their
service to and activities on behalf of the corporation; and,
WHEREAS, the current impracticability of obtaining adequate insurance and
the uncertainties relating to indemnification have increased the difficulty of
attracting and retaining such persons; and,
WHEREAS, the Board of Directors of the Company (the "Board") has determined
that the difficulty in attracting and retaining such persons is detrimental to
the best interests of the Company's shareholders and that the Company should act
to assure such persons that there will be increased certainty of such protection
in the future; and,
WHEREAS, it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify such persons to the fullest extent
permitted by applicable law so that they will serve or continue to serve the
Company free from undue concern that they will not be so indemnified; and,
WHEREAS, Indemnitee is willing to serve, continue to serve and/or to take
on additional service for or on behalf of the Company on the condition that he
be so indemnified;
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:
1. Services by Indemnitee. Indemnitee agrees to serve or continue to
----------------------
serve as a director of the Company. This Agreement shall not impose any
obligation on the Indemnitee or the Company to continue the Indemnitee's
position with the Company beyond any period otherwise applicable.
2. General. The Company shall indemnify and shall advance Expenses (as
-------
hereinafter defined) to Indemnitee as provided in this Agreement and to the
fullest extent permitted by law.
3. Proceedings Other Than Proceedings by or in the Right of the Company.
--------------------------------------------------------------------
Indemnitee shall be entitled to the rights of indemnification provided in this
Section 3 if, by reason of his Corporate Status, (as hereinafter defined), he
is, or is threatened to be made, a party to any threatened, pending, or
completed Proceeding (as hereinafter defined), other than a Proceeding by or in
the right of the Company. Pursuant to this Section 3, Indemnitee shall be
indemnified against expenses, judgments, penalties, fines and amounts paid in
settlement actually and reasonably incurred by him or on his behalf in
connection with such Proceeding or any claim, issue or matter therein, if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company, and, with respect to any criminal
Proceeding, had no reasonable cause to believe his conduct was unlawful.
4. Proceedings by or in the Right of the Company. Indemnitee shall be
---------------------------------------------
entitled to the rights of indemnification provided in this Section 4, if, by
reason of his Corporate Status, he is, or is threatened to be made, a party to
any threatened, pending or completed Proceeding brought by or in the right of
the
<PAGE>
Company to procure a judgment in its favor. Pursuant to this Section, Indemnitee
shall be indemnified against Expenses actually and reasonably incurred by him or
on his behalf in connection with such Proceeding if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best interests
of the Company. Notwithstanding the foregoing, no indemnification against such
Expenses shall be made in respect of any claim, issue or matter as to which
Indemnitee shall have been adjudged to be liable to the Company if such
indemnification is not permitted by Delaware law; provided, however, that
indemnification against Expenses shall nevertheless be made by the Company in
such event to the extent that the Court of Chancery of the State of Delaware, or
the court in which such Proceeding shall have been brought or is pending, shall
determine.
5. Indemnification for Expenses of a Party who is Wholly or Partly
---------------------------------------------------------------
Successful. Notwithstanding any other provision of this Agreement, to the
- ----------
extent that Indemnitee is, by reason of his Corporate Status, a party to and is
successful, on the merits or otherwise, in any Proceeding, he shall be
indemnified against all Expenses actually and reasonably incurred by him or on
his behalf in connection therewith. If Indemnitee is not wholly successful in
such Proceeding but is successful, on the merits or otherwise, as to one or more
but less than all claims, issues or matters in such Proceeding, the Company
shall indemnify Indemnitee against all Expenses actually and reasonably incurred
by him or on his behalf in connection with each successfully resolved claim,
issue or matter. For purposes of this Section and without limitation, the
termination of any claim, issue or matter in such a Proceeding by dismissal or
withdrawal, with or without prejudice, shall be deemed to be a successful result
as to such claim, issue or matter.
6. Advance of Expenses. The Company shall advance all reasonable Expenses
-------------------
incurred by or on behalf of Indemnitee in connection with any Proceeding within
twenty days after the receipt by the Company of a statement or statements from
Indemnitee requesting such advance or advances from time to time, whether prior
to or after final disposition of such Proceeding. Such statement or statements
shall reasonably evidence the Expenses incurred by Indemnitee and shall include
or be preceded or accompanied by an undertaking by or on behalf of Indemnitee to
repay any Expenses advanced if it shall ultimately be determined that Indemnitee
is not entitled to be indemnified against such Expenses.
7. Procedure for Determination of Entitlement to Indemnification.
-------------------------------------------------------------
(a) To obtain indemnification under this Agreement, Indemnitee shall
submit to the Company a written request, including therein or therewith such
documentation and information as is reasonably available to Indemnitee and is
reasonably necessary to determine whether and to what extent Indemnitee is
entitled to indemnification. The Secretary of the Company shall, promptly upon
receipt of such a request for indemnification, advise the Board of Directors in
writing that Indemnitee has requested indemnification.
(b) Upon written request by Indemnitee for indemnification pursuant to
Section 7(a) hereof, a determination, if required by applicable law, with
respect to Indemnitee's entitlement thereto shall be made in the specific case:
(i) if a Change in Control (as hereinafter defined) shall have occurred, by
Independent Counsel (as hereinafter defined) in a written opinion to the Board
of Directors, a copy of which shall be delivered to Indemnitee (unless
Indemnitee shall request that such determination be made by the Board of
Directors or the shareholders, in which case the determination shall be made in
the manner provided below in clauses (ii) or (iii); (ii) if a Change of Control
shall not have occurred, (A) by the Board of Directors by a majority vote of a
quorum consisting of Disinterested Directors (as hereinafter defined), or (B) if
a quorum of the Board of Directors consisting of Disinterested Directors is not
obtainable or, even if obtainable, such quorum of Disinterested Directors so
directs, by Independent Counsel in a written opinion to the Board of Directors,
a copy of which shall be delivered to Indemnitee or (C) by the shareholders of
the Company; or (iii) as provided in Section 8(b) of this Agreement; and, if it
is so determined that Indemnitee is entitled to indemnification, payment to
Indemnitee shall be made within ten (10) days after such determination.
Indemnitee shall cooperate with the person, persons or entity making such
determination with respect to Indemnitee's entitlement to indemnification,
including providing to such person, persons or entity upon reasonable advance
request any documentation or information which is not privileged or otherwise
protected from disclosure and which is reasonably
<PAGE>
available to Indemnitee and reasonably necessary to such determination. Any
costs of expenses (including attorneys' fees and disbursements) incurred by
Indemnitee in so cooperating shall be borne by the Company (irrespective of the
determination), and the Company hereby indemnifies and agrees to hold Indemnitee
harmless therefrom.
(c) In the event the determination of entitlement to indemnification is to
be made by Independent Counsel pursuant to Section 7(b) of this Agreement, the
Independent Counsel shall be selected as provided in this Section 7(c). If a
Change of Control shall not have occurred, the Independent Counsel shall be
selected by the Board of Directors, and the Company shall give written notice to
Indemnitee advising him of the identity of the Independent Counsel so selected.
If a Change of Control shall have occurred, the Independent Counsel shall be
selected by Indemnitee (unless Indemnitee shall request that such selection be
made by the Board of Directors, in which event the preceding sentence shall
apply), and Indemnitee shall give written notice to the Company advising it of
the identity of the Independent Counsel so selected. In either event,
Indemnitee or the Company, as the case may be, may within 7 days after such
written notice of selection shall have been given, deliver to the Company or to
Indemnitee, as the case may be, a written objection to such selection. Such
objection may be asserted only on the ground that the Independent Counsel so
selected does not meet the requirements of "Independent Counsel" as defined in
Section 13 of this Agreement, and the objection shall set forth with
particularity the factual basis of such assertion. If such written objection is
made, the Independent Counsel so selected may not serve as Independent Counsel
unless and until a court has determined that such objection is without merit.
If, within 20 days after submission by Indemnitee of a written request for
indemnification pursuant to Section 7(a) hereof, no Independent Counsel shall
have been selected or if selected, shall have been objected to, in accordance
with this Section 7(c), either the Company or Indemnitee may petition the Court
of Chancery of the State of Delaware or other court of competent jurisdiction
for resolution of any objection which shall have been made by the Company or
Indemnitee to the other's selection of Independent Counsel and/or for the
appointment as Independent Counsel of a person selected by the Court or by such
other person as the Court shall designate, and the person with respect to whom
an objection is favorably resolved or the person so appointed shall act as
Independent Counsel under Section 7(b) hereof. The Company shall pay any and
all reasonable fees and expenses of Independent Counsel incurred by such
Independent Counsel in connection with acting pursuant to Section 7(b) hereof,
and the Company shall pay all reasonable fees and expenses incident to the
procedures of this Section 7(c), regardless of the manner in which such
Independent Counsel was selected or appointed. Upon the due commencement of any
judicial proceeding or arbitration pursuant to Section 9(a)(iii) of this
Agreement, Independent Counsel shall be discharged and relieved of any further
responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).
8. Presumptions and Effect of Certain Proceedings.
----------------------------------------------
(a) If a Change of Control shall have occurred in making a determination
with respect to entitlement to indemnification hereunder, the person, persons or
entity making such determination shall presume that Indemnitee is entitled to
indemnification under this Agreement if Indemnitee has submitted a request for
indemnification in accordance with Section 7(a) of this Agreement, and the
Company shall have the burden of proof to overcome that presumption in
connection with the making by any person, persons or entity of any determination
contrary to that presumption.
(b) If the person, persons or entity empowered or selected under Section 7
of this Agreement to determine whether Indemnitee is entitled to indemnification
shall not have made such determination within 60 days after receipt by the
Company of the request therefor, the requisite determination of entitlement to
indemnification shall be deemed to have been made, and Indemnitee shall be
entitled to such indemnification, absent (i) a misstatement by Indemnitee of a
material fact, or an omission of a material fact necessary to make Indemnitee's
statement not materially misleading, in connection with the request for
indemnification, or (ii) a prohibition of such indemnification under applicable
law; provided, however, that such 60-day period may be extended for a reasonable
time, not to exceed an additional 30 days, if the person, persons or entity
making the determination with respect to entitlement to indemnification in good
faith requires such additional time for the obtaining or evaluating of
<PAGE>
documentation and/or information relating thereto; and provided, further, that
the foregoing provisions of this Section 8(b) shall not apply (i) if the
determination of entitlement to indemnification is to be made by the
shareholders pursuant to Section 7(b) of this Agreement and if (A) within 15
days after receipt by the Company of the request for such determination the
Board of Directors has resolved to submit such determination to the shareholders
for their consideration at an annual meeting thereof to be held within 75 days
after such receipt and such determination is made thereat, (B) a special meeting
of shareholders is called within 15 days after such receipt for the purpose of
making such determination, such meeting is held for such purpose within 60 days
after having been so called and such determination is made thereat, or (ii) if
the determination of entitlement to indemnification is to be made by Independent
Counsel pursuant to Section 7(b) of this Agreement.
(c) The termination of any Proceeding or of any claim, issue or matter
therein by judgment, order, settlement or conviction, or upon a plea of nolo
----
contendere or its equivalent, shall not (except as otherwise expressly provided
- ----------
in this Agreement) of itself adversely affect the right of Indemnitee to
indemnification or create a presumption that Indemnitee did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the Company or, with respect to any criminal Proceeding,
that Indemnitee had reasonable cause to believe that his conduct was unlawful.
9. Remedies of Indemnitee.
----------------------
(a) In the event that (i) a determination is made pursuant to Section 7 of
this Agreement that Indemnitee is not entitled to indemnification under this
Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 6
of this Agreement, (iii) the determination of entitlement to indemnification is
to be made by Independent Counsel pursuant to Section 7(b) of this Agreement and
such determination shall not have been made and delivered in a written opinion
within 90 days after receipt by the Company of the request for indemnification,
(iv) payment of indemnification is not made pursuant to Section 5 of this
Agreement within ten (10) days after receipt by the Company of a written request
therefor, or (v) payment of indemnification is not made within ten (10) days
after a determination has been made that Indemnitee is entitled to
indemnification or such determination is deemed to have been made pursuant to
Section 8 of this Agreement, Indemnitee shall be entitled to an adjudication in
an appropriate court of the State of Delaware, or in any other court of
competent jurisdiction, of his entitlement to such indemnification or
advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an
award in arbitration to be conducted by a single arbitrator pursuant to the
rules of the American Arbitration Association. Indemnitee shall commence such
proceeding seeking an adjudication or an award in arbitration within 180 days
following the date on which Indemnitee first has the right to commence such
proceeding pursuant to this Section 9(a). The Company shall not oppose
Indemnitee's right to seek any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made pursuant to
Section 7 of this Agreement that Indemnitee is not entitled to indemnification,
any judicial proceeding or arbitration commenced pursuant to this Section 9
shall be conducted in all respects as a de novo trial, or arbitration, on the
-- ----
merits and Indemnitee shall not be prejudiced by reason of that adverse
determination. If a Change of Control shall have occurred in any judicial
proceeding or arbitration commenced pursuant to this Section 9, the Company
shall have the burden of proving that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be.
(c) If a determination shall have been made or deemed to have been made
pursuant to Section 7 or 8 of this Agreement that Indemnitee is entitled to
indemnification, the Company shall be bound by such determination in any
judicial proceeding or arbitration commenced pursuant to this Section 9, absent
(i) a misstatement by Indemnitee of a material fact, or an omission of a
material fact necessary to make Indemnitee's statement not materially
misleading, in connection with the request for indemnification, or (ii) a
prohibition of such indemnification under applicable law.
(d) The Company shall be precluded from asserting in any judicial
proceedings or arbitration commenced pursuant to this Section 9 that the
procedures and presumptions of this Agreement are not
<PAGE>
valid, binding and enforceable and shall stipulate in any such court or before
any such arbitrator that the Company is bound by all the provisions of this
Agreement.
(e) In the event that Indemnitee, pursuant to this Section 9, seeks a
judicial adjudication of or an award in arbitration to enforce his rights under,
or to recover damages for breach of, this Agreement, Indemnitee shall be
entitled to recover from the Company, and shall be indemnified by the Company
against, any and all expenses (of the types described in the definition of
Expenses in Section 13 of this Agreement) actually and reasonably incurred by
him in such judicial adjudication or arbitration, but only if he prevails
therein. If it shall be determined in said judicial adjudication or arbitration
that Indemnitee is entitled to receive part but not all of the indemnification
or advancement of expenses sought, the expenses incurred by Indemnitee in
connection with such judicial adjudication or arbitration shall be appropriately
prorated.
10. Security. To the extent requested by the Indemnitee and approved by
--------
the Board, the Company may at any time and from time to time provide security to
the Indemnitee for the Company's obligations hereunder through an irrevocable
bank line of credit, funded trust, or other collateral. Any such security, once
provided to the Indemnitee, may not be revoked or released without the prior
written consent of Indemnitee.
11. Non-Exclusivity; Duration of Agreement, Insurance; Subrogation.
--------------------------------------------------------------
(a) The rights of indemnification and to receive advancement of Expenses
as provided by this Agreement shall not be deemed exclusive of any other rights
to which Indemnitee may at any time be entitled under applicable law, the
Company's certificate of incorporation or by-laws, any other agreement, a vote
of shareholders or a resolution of directors, or otherwise. This Agreement
shall continue until and terminate upon the later of: (a) 10 years after the
date that Indemnitee shall have ceased to serve as a director or officer of the
Company or fiduciary of any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise on which Indemnitee served at
the request of the Company; or (b) the final termination of all pending
Proceedings in respect of which Indemnitee is granted rights of indemnification
or advancement of expenses hereunder and of any proceeding commenced by
Indemnitee pursuant to Section 9 of this Agreement relating thereto. This
Agreement shall be binding upon the Company and its successors and assigns and
shall inure to the benefit of Indemnitee and his heirs, executors and
administrators.
(b) To the extent that the Company maintains an insurance policy or
policies providing liability insurance for directors and officers of the Company
or fiduciaries of any other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise which such person serves at the
request of the Company, Indemnitee shall be covered by such policy or policies
in accordance with its or their terms to the maximum extent of the coverage
available for any such director or officer under such policy or policies.
(c) In the event of any payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee who shall execute all papers required and take all action necessary
to secure such rights including execution of such documents as are necessary to
enable the Company to bring suit to enforce such rights.
(d) The Company shall not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable hereunder if and to the extent that
Indemnitee has otherwise actually received such payment under any insurance
policy, contract, agreement or otherwise.
12. Severability. If any provision or provisions of this Agreement shall
------------
be held to be invalid, illegal or unenforceable for any reason whatsoever: (a)
the validity, legality and enforceability of the remaining provisions of this
Agreement (including, without limitation, each portion of any Section of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall not
in any way be affected or impaired thereby; and (b) to the fullest extent
possible, the provisions of this Agreement (including, without limitation, each
portion of any
<PAGE>
Section of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that is not itself invalid, illegal or unenforceable)
shall be construed so as to give effect to the intent manifested by the
provision held invalid, illegal or unenforceable.
13. Exception to Right of Indemnification or Advancement of Expenses.
----------------------------------------------------------------
Notwithstanding any other provision of this Agreement, Indemnitee shall not be
entitled to indemnification or advancement of Expenses under this Agreement with
respect to any Proceeding, or any claim therein, brought or made by him against
the Company.
14. Definitions. For purposes of this Agreement:
-----------
(a) "Change in Control" means a change in control of the Company of a
nature that would be required to be reported in response to Item 5(f) of
Schedule 14A of Regulation 14A (or in response to any similar item on any
similar schedule or form) promulgated under the Securities Exchange Act of 1934
(the "Act"), whether or not the Company is then subject to such reporting
requirement; provided, however, that, without limitation, such a Change in
Control shall be deemed to have occurred if (i) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Act), directly or indirectly, of
securities of the Company representing 20% or more of the combined voting power
of the Company's then outstanding securities without the prior approval of at
least two-thirds of the members of the Board of Directors in office immediately
prior to such person attaining such percentage interest; (ii) the Company is a
party to a merger, consolidation, sale of assets or other reorganization, or a
proxy contest, as a consequence of which members of the Board of Directors in
office immediately prior to such transaction or event constitute less than a
majority of the Board of Directors thereafter; or (iii) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Board of Directors (including for this purpose any new director whose
election or nomination for election by the Company's shareholders was approved
by a vote of at least two-thirds of the directors then still in office who were
directors at the beginning of such period) cease for any reason to constitute at
least a majority of the Board of Directors.
(b) "Corporate Status" describes the status of a person who is or was or
has agreed to become a director of the Company, or is or was an officer or
fiduciary of the Company or of any other corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise which such person is
or was serving at the request of the Company.
(c) "Disinterested Directors" means a director of the Company who is not
and was not a party to the Proceeding in respect of which indemnification is
sought by Indemnitee.
(d) "Expenses" shall include all reasonable attorneys' fees, retainers,
court costs, transcript costs, fees of experts, travel expenses, duplicating
costs, printing and binding costs, telephone charges, postage, delivery service
fees, and all other disbursements or expenses of the types customarily incurred
in connection with prosecuting, defending, preparing to prosecute or defend or
investigating a Proceeding.
(e) "Independent Counsel" means a law firm, or a member of a law firm,
that is experienced in matters of corporation law and neither presently is, nor
in the past five years has been, retained to represent: (i) the Company or
Indemnitee in any matter material to either such party, or (ii) any other party
to the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term "Independent Counsel" shall not include
any person who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the Company
or Indemnitee in an action to determine Indemnitee's rights under this
Agreement.
(f) "Proceeding" includes any action, suit, arbitration, alternate dispute
resolution mechanism, investigation, administrative hearing or any other
proceeding, whether civil, criminal, administrative or investigative, arising on
or after the date of this Agreement (and regardless of when the Indemnitee's act
<PAGE>
or failure to act occurred), except one initiated by an Indemnitee pursuant to
Section 9 of this Agreement to enforce his rights under this Agreement.
15. Headings. The headings of the paragraphs of this Agreement are
--------
inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.
16. Modification and Waiver. This Agreement may be amended from time to
-----------------------
time to reflect changes in Delaware law or for other reasons. No supplement,
modification or amendment of this Agreement shall be binding unless executed in
writing by both of the parties hereto. No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (whether or not similar) nor shall such waiver constitute a
continuing waiver.
17. Notice by Indemnitee. Indemnitee agrees promptly to notify the
--------------------
Company in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to any Proceeding
or matter which may be subject to indemnification or advancement of Expenses
covered hereunder, provided, however, that the failure to give any such notice
shall not disqualify the Indemnitee from indemnification hereunder.
18. Notices. All notices, requests, demands and other communications
-------
hereunder shall be in writing and shall be deemed to have been duly given if (i)
delivered by hand and receipted for by the party to whom said notice or other
communication shall have been directed, or (ii) mailed by certified or
registered mail with postage prepaid, on the third business day after the date
on which it is so mailed:
(a) If to Indemnitee, to:
Enrico Albareto, Chief Executive Officer
Elsag Bailey, S.p.A.
Via G. Puccini 2
Genoa 16154 Italy
(b) If to the Company, to:
Secretary
Brown & Sharpe Manufacturing Company
Precision Park
200 Frenchtown Road
North Kingstown, RI 02852-1700
or to such other address as may have been furnished to Indemnitee by the Company
or to the Company by Indemnitee, as the case may be.
19. Governing Law. The parties agree that this Agreement shall be
-------------
governed by and construed and enforced in accordance with the laws of the State
of Delaware.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and
as of the day and year first above written.
Attest: Brown & Sharpe Manufacturing Company
By: ________________________ By: ___________________________
Secretary Fred M. Stuber
President & Chief Executive Officer
Indemnitee
_______________________________
Enrico Albareto
Address: Elsag Bailey S.p.A.
Via G. Puccini 2
Genoa 16154 Italy
<PAGE>
Exhibit 10.64
INDEMNITY AGREEMENT
-------------------
THIS AGREEMENT, made and entered into on and as of this 28th day of
October, 1994, (the "Agreement"), is by and between Brown & Sharpe Manufacturing
Company, a Delaware corporation, (the "Company," which term shall include any
one or more of its subsidiaries where appropriate), and Alberto de Benedictis
(the "Indemnitee"):
RECITALS
WHEREAS, highly competent persons are becoming more reluctant to serve
publicly-held corporations as directors or in other capacities unless they are
provided with adequate protection through insurance or adequate indemnification
against inordinate risks of claims and actions against them arising out of their
service to and activities on behalf of the corporation; and,
WHEREAS, the current impracticability of obtaining adequate insurance and
the uncertainties relating to indemnification have increased the difficulty of
attracting and retaining such persons; and,
WHEREAS, the Board of Directors of the Company (the "Board") has determined
that the difficulty in attracting and retaining such persons is detrimental to
the best interests of the Company's shareholders and that the Company should act
to assure such persons that there will be increased certainty of such protection
in the future; and,
WHEREAS, it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify such persons to the fullest extent
permitted by applicable law so that they will serve or continue to serve the
Company free from undue concern that they will not be so indemnified; and,
WHEREAS, Indemnitee is willing to serve, continue to serve and/or to take
on additional service for or on behalf of the Company on the condition that he
be so indemnified;
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:
1. Services by Indemnitee. Indemnitee agrees to serve or continue to
----------------------
serve as a director of the Company. This Agreement shall not impose any
obligation on the Indemnitee or the Company to continue the Indemnitee's
position with the Company beyond any period otherwise applicable.
2. General. The Company shall indemnify and shall advance Expenses (as
-------
hereinafter defined) to Indemnitee as provided in this Agreement and to the
fullest extent permitted by law.
3. Proceedings Other Than Proceedings by or in the Right of the Company.
--------------------------------------------------------------------
Indemnitee shall be entitled to the rights of indemnification provided in this
Section 3 if, by reason of his Corporate Status, (as hereinafter defined), he
is, or is threatened to be made, a party to any threatened, pending, or
completed Proceeding (as hereinafter defined), other than a Proceeding by or in
the right of the Company. Pursuant to this Section 3, Indemnitee shall be
indemnified against expenses, judgments, penalties, fines and amounts paid in
settlement actually and reasonably incurred by him or on his behalf in
connection with such Proceeding or any claim, issue or matter therein, if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company, and, with respect to any criminal
Proceeding, had no reasonable cause to believe his conduct was unlawful.
4. Proceedings by or in the Right of the Company. Indemnitee shall be
---------------------------------------------
entitled to the rights of indemnification provided in this Section 4, if, by
reason of his Corporate Status, he is, or is threatened to be made, a party to
any threatened, pending or completed Proceeding brought by or in the right of
the
<PAGE>
Company to procure a judgment in its favor. Pursuant to this Section, Indemnitee
shall be indemnified against Expenses actually and reasonably incurred by him or
on his behalf in connection with such Proceeding if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best interests
of the Company. Notwithstanding the foregoing, no indemnification against such
Expenses shall be made in respect of any claim, issue or matter as to which
Indemnitee shall have been adjudged to be liable to the Company if such
indemnification is not permitted by Delaware law; provided, however, that
indemnification against Expenses shall nevertheless be made by the Company in
such event to the extent that the Court of Chancery of the State of Delaware, or
the court in which such Proceeding shall have been brought or is pending, shall
determine.
5. Indemnification for Expenses of a Party who is Wholly or Partly
---------------------------------------------------------------
Successful. Notwithstanding any other provision of this Agreement, to the
- ----------
extent that Indemnitee is, by reason of his Corporate Status, a party to and is
successful, on the merits or otherwise, in any Proceeding, he shall be
indemnified against all Expenses actually and reasonably incurred by him or on
his behalf in connection therewith. If Indemnitee is not wholly successful in
such Proceeding but is successful, on the merits or otherwise, as to one or more
but less than all claims, issues or matters in such Proceeding, the Company
shall indemnify Indemnitee against all Expenses actually and reasonably incurred
by him or on his behalf in connection with each successfully resolved claim,
issue or matter. For purposes of this Section and without limitation, the
termination of any claim, issue or matter in such a Proceeding by dismissal or
withdrawal, with or without prejudice, shall be deemed to be a successful result
as to such claim, issue or matter.
6. Advance of Expenses. The Company shall advance all reasonable Expenses
-------------------
incurred by or on behalf of Indemnitee in connection with any Proceeding within
twenty days after the receipt by the Company of a statement or statements from
Indemnitee requesting such advance or advances from time to time, whether prior
to or after final disposition of such Proceeding. Such statement or statements
shall reasonably evidence the Expenses incurred by Indemnitee and shall include
or be preceded or accompanied by an undertaking by or on behalf of Indemnitee to
repay any Expenses advanced if it shall ultimately be determined that Indemnitee
is not entitled to be indemnified against such Expenses.
7. Procedure for Determination of Entitlement to Indemnification.
-------------------------------------------------------------
(a) To obtain indemnification under this Agreement, Indemnitee shall
submit to the Company a written request, including therein or therewith such
documentation and information as is reasonably available to Indemnitee and is
reasonably necessary to determine whether and to what extent Indemnitee is
entitled to indemnification. The Secretary of the Company shall, promptly upon
receipt of such a request for indemnification, advise the Board of Directors in
writing that Indemnitee has requested indemnification.
(b) Upon written request by Indemnitee for indemnification pursuant to
Section 7(a) hereof, a determination, if required by applicable law, with
respect to Indemnitee's entitlement thereto shall be made in the specific case:
(i) if a Change in Control (as hereinafter defined) shall have occurred, by
Independent Counsel (as hereinafter defined) in a written opinion to the Board
of Directors, a copy of which shall be delivered to Indemnitee (unless
Indemnitee shall request that such determination be made by the Board of
Directors or the shareholders, in which case the determination shall be made in
the manner provided below in clauses (ii) or (iii); (ii) if a Change of Control
shall not have occurred, (A) by the Board of Directors by a majority vote of a
quorum consisting of Disinterested Directors (as hereinafter defined), or (B) if
a quorum of the Board of Directors consisting of Disinterested Directors is not
obtainable or, even if obtainable, such quorum of Disinterested Directors so
directs, by Independent Counsel in a written opinion to the Board of Directors,
a copy of which shall be delivered to Indemnitee or (C) by the shareholders of
the Company; or (iii) as provided in Section 8(b) of this Agreement; and, if it
is so determined that Indemnitee is entitled to indemnification, payment to
Indemnitee shall be made within ten (10) days after such determination.
Indemnitee shall cooperate with the person, persons or entity making such
determination with respect to Indemnitee's entitlement to indemnification,
including providing to such person, persons or entity upon reasonable advance
request any documentation or information which is not privileged or otherwise
protected from disclosure and which is reasonably
<PAGE>
available to Indemnitee and reasonably necessary to such determination. Any
costs of expenses (including attorneys' fees and disbursements) incurred by
Indemnitee in so cooperating shall be borne by the Company (irrespective of the
determination), and the Company hereby indemnifies and agrees to hold Indemnitee
harmless therefrom.
(c) In the event the determination of entitlement to indemnification is to
be made by Independent Counsel pursuant to Section 7(b) of this Agreement, the
Independent Counsel shall be selected as provided in this Section 7(c). If a
Change of Control shall not have occurred, the Independent Counsel shall be
selected by the Board of Directors, and the Company shall give written notice to
Indemnitee advising him of the identity of the Independent Counsel so selected.
If a Change of Control shall have occurred, the Independent Counsel shall be
selected by Indemnitee (unless Indemnitee shall request that such selection be
made by the Board of Directors, in which event the preceding sentence shall
apply), and Indemnitee shall give written notice to the Company advising it of
the identity of the Independent Counsel so selected. In either event,
Indemnitee or the Company, as the case may be, may within 7 days after such
written notice of selection shall have been given, deliver to the Company or to
Indemnitee, as the case may be, a written objection to such selection. Such
objection may be asserted only on the ground that the Independent Counsel so
selected does not meet the requirements of "Independent Counsel" as defined in
Section 13 of this Agreement, and the objection shall set forth with
particularity the factual basis of such assertion. If such written objection is
made, the Independent Counsel so selected may not serve as Independent Counsel
unless and until a court has determined that such objection is without merit.
If, within 20 days after submission by Indemnitee of a written request for
indemnification pursuant to Section 7(a) hereof, no Independent Counsel shall
have been selected or if selected, shall have been objected to, in accordance
with this Section 7(c), either the Company or Indemnitee may petition the Court
of Chancery of the State of Delaware or other court of competent jurisdiction
for resolution of any objection which shall have been made by the Company or
Indemnitee to the other's selection of Independent Counsel and/or for the
appointment as Independent Counsel of a person selected by the Court or by such
other person as the Court shall designate, and the person with respect to whom
an objection is favorably resolved or the person so appointed shall act as
Independent Counsel under Section 7(b) hereof. The Company shall pay any and
all reasonable fees and expenses of Independent Counsel incurred by such
Independent Counsel in connection with acting pursuant to Section 7(b) hereof,
and the Company shall pay all reasonable fees and expenses incident to the
procedures of this Section 7(c), regardless of the manner in which such
Independent Counsel was selected or appointed. Upon the due commencement of any
judicial proceeding or arbitration pursuant to Section 9(a)(iii) of this
Agreement, Independent Counsel shall be discharged and relieved of any further
responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).
8. Presumptions and Effect of Certain Proceedings.
----------------------------------------------
(a) If a Change of Control shall have occurred in making a determination
with respect to entitlement to indemnification hereunder, the person, persons or
entity making such determination shall presume that Indemnitee is entitled to
indemnification under this Agreement if Indemnitee has submitted a request for
indemnification in accordance with Section 7(a) of this Agreement, and the
Company shall have the burden of proof to overcome that presumption in
connection with the making by any person, persons or entity of any determination
contrary to that presumption.
(b) If the person, persons or entity empowered or selected under Section 7
of this Agreement to determine whether Indemnitee is entitled to indemnification
shall not have made such determination within 60 days after receipt by the
Company of the request therefor, the requisite determination of entitlement to
indemnification shall be deemed to have been made, and Indemnitee shall be
entitled to such indemnification, absent (i) a misstatement by Indemnitee of a
material fact, or an omission of a material fact necessary to make Indemnitee's
statement not materially misleading, in connection with the request for
indemnification, or (ii) a prohibition of such indemnification under applicable
law; provided, however, that such 60-day period may be extended for a reasonable
time, not to exceed an additional 30 days, if the person, persons or entity
making the determination with respect to entitlement to indemnification in good
faith requires such additional time for the obtaining or evaluating of
<PAGE>
documentation and/or information relating thereto; and provided, further, that
the foregoing provisions of this Section 8(b) shall not apply (i) if the
determination of entitlement to indemnification is to be made by the
shareholders pursuant to Section 7(b) of this Agreement and if (A) within 15
days after receipt by the Company of the request for such determination the
Board of Directors has resolved to submit such determination to the shareholders
for their consideration at an annual meeting thereof to be held within 75 days
after such receipt and such determination is made thereat, (B) a special meeting
of shareholders is called within 15 days after such receipt for the purpose of
making such determination, such meeting is held for such purpose within 60 days
after having been so called and such determination is made thereat, or (ii) if
the determination of entitlement to indemnification is to be made by Independent
Counsel pursuant to Section 7(b) of this Agreement.
(c) The termination of any Proceeding or of any claim, issue or matter
therein by judgment, order, settlement or conviction, or upon a plea of nolo
----
contendere or its equivalent, shall not (except as otherwise expressly provided
- ----------
in this Agreement) of itself adversely affect the right of Indemnitee to
indemnification or create a presumption that Indemnitee did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the Company or, with respect to any criminal Proceeding,
that Indemnitee had reasonable cause to believe that his conduct was unlawful.
9. Remedies of Indemnitee.
----------------------
(a) In the event that (i) a determination is made pursuant to Section 7 of
this Agreement that Indemnitee is not entitled to indemnification under this
Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 6
of this Agreement, (iii) the determination of entitlement to indemnification is
to be made by Independent Counsel pursuant to Section 7(b) of this Agreement and
such determination shall not have been made and delivered in a written opinion
within 90 days after receipt by the Company of the request for indemnification,
(iv) payment of indemnification is not made pursuant to Section 5 of this
Agreement within ten (10) days after receipt by the Company of a written request
therefor, or (v) payment of indemnification is not made within ten (10) days
after a determination has been made that Indemnitee is entitled to
indemnification or such determination is deemed to have been made pursuant to
Section 8 of this Agreement, Indemnitee shall be entitled to an adjudication in
an appropriate court of the State of Delaware, or in any other court of
competent jurisdiction, of his entitlement to such indemnification or
advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an
award in arbitration to be conducted by a single arbitrator pursuant to the
rules of the American Arbitration Association. Indemnitee shall commence such
proceeding seeking an adjudication or an award in arbitration within 180 days
following the date on which Indemnitee first has the right to commence such
proceeding pursuant to this Section 9(a). The Company shall not oppose
Indemnitee's right to seek any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made pursuant to
Section 7 of this Agreement that Indemnitee is not entitled to indemnification,
any judicial proceeding or arbitration commenced pursuant to this Section 9
shall be conducted in all respects as a de novo trial, or arbitration, on the
-- ----
merits and Indemnitee shall not be prejudiced by reason of that adverse
determination. If a Change of Control shall have occurred in any judicial
proceeding or arbitration commenced pursuant to this Section 9, the Company
shall have the burden of proving that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be.
(c) If a determination shall have been made or deemed to have been made
pursuant to Section 7 or 8 of this Agreement that Indemnitee is entitled to
indemnification, the Company shall be bound by such determination in any
judicial proceeding or arbitration commenced pursuant to this Section 9, absent
(i) a misstatement by Indemnitee of a material fact, or an omission of a
material fact necessary to make Indemnitee's statement not materially
misleading, in connection with the request for indemnification, or (ii) a
prohibition of such indemnification under applicable law.
(d) The Company shall be precluded from asserting in any judicial
proceedings or arbitration commenced pursuant to this Section 9 that the
procedures and presumptions of this Agreement are not
<PAGE>
valid, binding and enforceable and shall stipulate in any such court or before
any such arbitrator that the Company is bound by all the provisions of this
Agreement.
(e) In the event that Indemnitee, pursuant to this Section 9, seeks a
judicial adjudication of or an award in arbitration to enforce his rights under,
or to recover damages for breach of, this Agreement, Indemnitee shall be
entitled to recover from the Company, and shall be indemnified by the Company
against, any and all expenses (of the types described in the definition of
Expenses in Section 13 of this Agreement) actually and reasonably incurred by
him in such judicial adjudication or arbitration, but only if he prevails
therein. If it shall be determined in said judicial adjudication or arbitration
that Indemnitee is entitled to receive part but not all of the indemnification
or advancement of expenses sought, the expenses incurred by Indemnitee in
connection with such judicial adjudication or arbitration shall be appropriately
prorated.
10. Security. To the extent requested by the Indemnitee and approved by
--------
the Board, the Company may at any time and from time to time provide security to
the Indemnitee for the Company's obligations hereunder through an irrevocable
bank line of credit, funded trust, or other collateral. Any such security, once
provided to the Indemnitee, may not be revoked or released without the prior
written consent of Indemnitee.
11. Non-Exclusivity; Duration of Agreement, Insurance; Subrogation.
--------------------------------------------------------------
(a) The rights of indemnification and to receive advancement of Expenses
as provided by this Agreement shall not be deemed exclusive of any other rights
to which Indemnitee may at any time be entitled under applicable law, the
Company's certificate of incorporation or by-laws, any other agreement, a vote
of shareholders or a resolution of directors, or otherwise. This Agreement
shall continue until and terminate upon the later of: (a) 10 years after the
date that Indemnitee shall have ceased to serve as a director or officer of the
Company or fiduciary of any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise on which Indemnitee served at
the request of the Company; or (b) the final termination of all pending
Proceedings in respect of which Indemnitee is granted rights of indemnification
or advancement of expenses hereunder and of any proceeding commenced by
Indemnitee pursuant to Section 9 of this Agreement relating thereto. This
Agreement shall be binding upon the Company and its successors and assigns and
shall inure to the benefit of Indemnitee and his heirs, executors and
administrators.
(b) To the extent that the Company maintains an insurance policy or
policies providing liability insurance for directors and officers of the Company
or fiduciaries of any other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise which such person serves at the
request of the Company, Indemnitee shall be covered by such policy or policies
in accordance with its or their terms to the maximum extent of the coverage
available for any such director or officer under such policy or policies.
(c) In the event of any payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee who shall execute all papers required and take all action necessary
to secure such rights including execution of such documents as are necessary to
enable the Company to bring suit to enforce such rights.
(d) The Company shall not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable hereunder if and to the extent that
Indemnitee has otherwise actually received such payment under any insurance
policy, contract, agreement or otherwise.
12. Severability. If any provision or provisions of this Agreement shall
------------
be held to be invalid, illegal or unenforceable for any reason whatsoever: (a)
the validity, legality and enforceability of the remaining provisions of this
Agreement (including, without limitation, each portion of any Section of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall not
in any way be affected or impaired thereby; and (b) to the fullest extent
possible, the provisions of this Agreement (including, without limitation, each
portion of any
<PAGE>
Section of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that is not itself invalid, illegal or unenforceable)
shall be construed so as to give effect to the intent manifested by the
provision held invalid, illegal or unenforceable.
13. Exception to Right of Indemnification or Advancement of Expenses.
----------------------------------------------------------------
Notwithstanding any other provision of this Agreement, Indemnitee shall not be
entitled to indemnification or advancement of Expenses under this Agreement with
respect to any Proceeding, or any claim therein, brought or made by him against
the Company.
14. Definitions. For purposes of this Agreement:
-----------
(a) "Change in Control" means a change in control of the Company of a
nature that would be required to be reported in response to Item 5(f) of
Schedule 14A of Regulation 14A (or in response to any similar item on any
similar schedule or form) promulgated under the Securities Exchange Act of 1934
(the "Act"), whether or not the Company is then subject to such reporting
requirement; provided, however, that, without limitation, such a Change in
Control shall be deemed to have occurred if (i) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Act), directly or indirectly, of
securities of the Company representing 20% or more of the combined voting power
of the Company's then outstanding securities without the prior approval of at
least two-thirds of the members of the Board of Directors in office immediately
prior to such person attaining such percentage interest; (ii) the Company is a
party to a merger, consolidation, sale of assets or other reorganization, or a
proxy contest, as a consequence of which members of the Board of Directors in
office immediately prior to such transaction or event constitute less than a
majority of the Board of Directors thereafter; or (iii) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Board of Directors (including for this purpose any new director whose
election or nomination for election by the Company's shareholders was approved
by a vote of at least two-thirds of the directors then still in office who were
directors at the beginning of such period) cease for any reason to constitute at
least a majority of the Board of Directors.
(b) "Corporate Status" describes the status of a person who is or was or
has agreed to become a director of the Company, or is or was an officer or
fiduciary of the Company or of any other corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise which such person is
or was serving at the request of the Company.
(c) "Disinterested Directors" means a director of the Company who is not
and was not a party to the Proceeding in respect of which indemnification is
sought by Indemnitee.
(d) "Expenses" shall include all reasonable attorneys' fees, retainers,
court costs, transcript costs, fees of experts, travel expenses, duplicating
costs, printing and binding costs, telephone charges, postage, delivery service
fees, and all other disbursements or expenses of the types customarily incurred
in connection with prosecuting, defending, preparing to prosecute or defend or
investigating a Proceeding.
(e) "Independent Counsel" means a law firm, or a member of a law firm,
that is experienced in matters of corporation law and neither presently is, nor
in the past five years has been, retained to represent: (i) the Company or
Indemnitee in any matter material to either such party, or (ii) any other party
to the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term "Independent Counsel" shall not include
any person who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the Company
or Indemnitee in an action to determine Indemnitee's rights under this
Agreement.
(f) "Proceeding" includes any action, suit, arbitration, alternate dispute
resolution mechanism, investigation, administrative hearing or any other
proceeding, whether civil, criminal, administrative or investigative, arising on
or after the date of this Agreement (and regardless of when the Indemnitee's act
<PAGE>
or failure to act occurred), except one initiated by an Indemnitee pursuant to
Section 9 of this Agreement to enforce his rights under this Agreement.
15. Headings. The headings of the paragraphs of this Agreement are
--------
inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.
16. Modification and Waiver. This Agreement may be amended from time to
-----------------------
time to reflect changes in Delaware law or for other reasons. No supplement,
modification or amendment of this Agreement shall be binding unless executed in
writing by both of the parties hereto. No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (whether or not similar) nor shall such waiver constitute a
continuing waiver.
17. Notice by Indemnitee. Indemnitee agrees promptly to notify the
--------------------
Company in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to any Proceeding
or matter which may be subject to indemnification or advancement of Expenses
covered hereunder, provided, however, that the failure to give any such notice
shall not disqualify the Indemnitee from indemnification hereunder.
18. Notices. All notices, requests, demands and other communications
-------
hereunder shall be in writing and shall be deemed to have been duly given if (i)
delivered by hand and receipted for by the party to whom said notice or other
communication shall have been directed, or (ii) mailed by certified or
registered mail with postage prepaid, on the third business day after the date
on which it is so mailed:
(a) If to Indemnitee, to:
Alberto de Benedictis,
Senior Vice President -- North America
Finmeccanica, S.p.A.
375 Park Avenue, Suite 3805
New York, NY 10152
(b) If to the Company, to:
Secretary
Brown & Sharpe Manufacturing Company
Precision Park
200 Frenchtown Road
North Kingstown, RI 02852-1700
or to such other address as may have been furnished to Indemnitee by the Company
or to the Company by Indemnitee, as the case may be.
19. Governing Law. The parties agree that this Agreement shall be
-------------
governed by and construed and enforced in accordance with the laws of the State
of Delaware.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and
as of the day and year first above written.
Attest: Brown & Sharpe Manufacturing Company
By: ___________________ By: ___________________________
Secretary Fred M. Stuber
President & Chief Executive Officer
Indemnitee
_______________________________
Alberto de Benedictis
Address: Finmeccanica S.p.A.
375 Park Avenue, Suite 3805
New York, NY 10152
<PAGE>
Exhibit 10.65
INDEMNITY AGREEMENT
-------------------
THIS AGREEMENT, made and entered into on and as of this 28th day of
October, 1994, (the "Agreement"), is by and between Brown & Sharpe Manufacturing
Company, a Delaware corporation, (the "Company," which term shall include any
one or more of its subsidiaries where appropriate), and Vincenzo Cannatelli (the
"Indemnitee"):
RECITALS
WHEREAS, highly competent persons are becoming more reluctant to serve
publicly-held corporations as directors or in other capacities unless they are
provided with adequate protection through insurance or adequate indemnification
against inordinate risks of claims and actions against them arising out of their
service to and activities on behalf of the corporation; and,
WHEREAS, the current impracticability of obtaining adequate insurance and
the uncertainties relating to indemnification have increased the difficulty of
attracting and retaining such persons; and,
WHEREAS, the Board of Directors of the Company (the "Board") has determined
that the difficulty in attracting and retaining such persons is detrimental to
the best interests of the Company's shareholders and that the Company should act
to assure such persons that there will be increased certainty of such protection
in the future; and,
WHEREAS, it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify such persons to the fullest extent
permitted by applicable law so that they will serve or continue to serve the
Company free from undue concern that they will not be so indemnified; and,
WHEREAS, Indemnitee is willing to serve, continue to serve and/or to take
on additional service for or on behalf of the Company on the condition that he
be so indemnified;
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:
1. Services by Indemnitee. Indemnitee agrees to serve or continue to
----------------------
serve as a director of the Company. This Agreement shall not impose any
obligation on the Indemnitee or the Company to continue the Indemnitee's
position with the Company beyond any period otherwise applicable.
2. General. The Company shall indemnify and shall advance Expenses (as
-------
hereinafter defined) to Indemnitee as provided in this Agreement and to the
fullest extent permitted by law.
3. Proceedings Other Than Proceedings by or in the Right of the Company.
--------------------------------------------------------------------
Indemnitee shall be entitled to the rights of indemnification provided in this
Section 3 if, by reason of his Corporate Status, (as hereinafter defined), he
is, or is threatened to be made, a party to any threatened, pending, or
completed Proceeding (as hereinafter defined), other than a Proceeding by or in
the right of the Company. Pursuant to this Section 3, Indemnitee shall be
indemnified against expenses, judgments, penalties, fines and amounts paid in
settlement actually and reasonably incurred by him or on his behalf in
connection with such Proceeding or any claim, issue or matter therein, if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company, and, with respect to any criminal
Proceeding, had no reasonable cause to believe his conduct was unlawful.
4. Proceedings by or in the Right of the Company. Indemnitee shall be
---------------------------------------------
entitled to the rights of indemnification provided in this Section 4, if, by
reason of his Corporate Status, he is, or is threatened to be made, a party to
any threatened, pending or completed Proceeding brought by or in the right of
the
<PAGE>
Company to procure a judgment in its favor. Pursuant to this Section, Indemnitee
shall be indemnified against Expenses actually and reasonably incurred by him or
on his behalf in connection with such Proceeding if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best interests
of the Company. Notwithstanding the foregoing, no indemnification against such
Expenses shall be made in respect of any claim, issue or matter as to which
Indemnitee shall have been adjudged to be liable to the Company if such
indemnification is not permitted by Delaware law; provided, however, that
indemnification against Expenses shall nevertheless be made by the Company in
such event to the extent that the Court of Chancery of the State of Delaware, or
the court in which such Proceeding shall have been brought or is pending, shall
determine.
5. Indemnification for Expenses of a Party who is Wholly or Partly
---------------------------------------------------------------
Successful. Notwithstanding any other provision of this Agreement, to the
- ----------
extent that Indemnitee is, by reason of his Corporate Status, a party to and is
successful, on the merits or otherwise, in any Proceeding, he shall be
indemnified against all Expenses actually and reasonably incurred by him or on
his behalf in connection therewith. If Indemnitee is not wholly successful in
such Proceeding but is successful, on the merits or otherwise, as to one or more
but less than all claims, issues or matters in such Proceeding, the Company
shall indemnify Indemnitee against all Expenses actually and reasonably incurred
by him or on his behalf in connection with each successfully resolved claim,
issue or matter. For purposes of this Section and without limitation, the
termination of any claim, issue or matter in such a Proceeding by dismissal or
withdrawal, with or without prejudice, shall be deemed to be a successful result
as to such claim, issue or matter.
6. Advance of Expenses. The Company shall advance all reasonable Expenses
-------------------
incurred by or on behalf of Indemnitee in connection with any Proceeding within
twenty days after the receipt by the Company of a statement or statements from
Indemnitee requesting such advance or advances from time to time, whether prior
to or after final disposition of such Proceeding. Such statement or statements
shall reasonably evidence the Expenses incurred by Indemnitee and shall include
or be preceded or accompanied by an undertaking by or on behalf of Indemnitee to
repay any Expenses advanced if it shall ultimately be determined that Indemnitee
is not entitled to be indemnified against such Expenses.
7. Procedure for Determination of Entitlement to Indemnification.
-------------------------------------------------------------
(a) To obtain indemnification under this Agreement, Indemnitee shall
submit to the Company a written request, including therein or therewith such
documentation and information as is reasonably available to Indemnitee and is
reasonably necessary to determine whether and to what extent Indemnitee is
entitled to indemnification. The Secretary of the Company shall, promptly upon
receipt of such a request for indemnification, advise the Board of Directors in
writing that Indemnitee has requested indemnification.
(b) Upon written request by Indemnitee for indemnification pursuant to
Section 7(a) hereof, a determination, if required by applicable law, with
respect to Indemnitee's entitlement thereto shall be made in the specific case:
(i) if a Change in Control (as hereinafter defined) shall have occurred, by
Independent Counsel (as hereinafter defined) in a written opinion to the Board
of Directors, a copy of which shall be delivered to Indemnitee (unless
Indemnitee shall request that such determination be made by the Board of
Directors or the shareholders, in which case the determination shall be made in
the manner provided below in clauses (ii) or (iii); (ii) if a Change of Control
shall not have occurred, (A) by the Board of Directors by a majority vote of a
quorum consisting of Disinterested Directors (as hereinafter defined), or (B) if
a quorum of the Board of Directors consisting of Disinterested Directors is not
obtainable or, even if obtainable, such quorum of Disinterested Directors so
directs, by Independent Counsel in a written opinion to the Board of Directors,
a copy of which shall be delivered to Indemnitee or (C) by the shareholders of
the Company; or (iii) as provided in Section 8(b) of this Agreement; and, if it
is so determined that Indemnitee is entitled to indemnification, payment to
Indemnitee shall be made within ten (10) days after such determination.
Indemnitee shall cooperate with the person, persons or entity making such
determination with respect to Indemnitee's entitlement to indemnification,
including providing to such person, persons or entity upon reasonable advance
request any documentation or information which is not privileged or otherwise
protected from disclosure and which is reasonably
<PAGE>
available to Indemnitee and reasonably necessary to such determination. Any
costs of expenses (including attorneys' fees and disbursements) incurred by
Indemnitee in so cooperating shall be borne by the Company (irrespective of the
determination), and the Company hereby indemnifies and agrees to hold Indemnitee
harmless therefrom.
(c) In the event the determination of entitlement to indemnification is to
be made by Independent Counsel pursuant to Section 7(b) of this Agreement, the
Independent Counsel shall be selected as provided in this Section 7(c). If a
Change of Control shall not have occurred, the Independent Counsel shall be
selected by the Board of Directors, and the Company shall give written notice to
Indemnitee advising him of the identity of the Independent Counsel so selected.
If a Change of Control shall have occurred, the Independent Counsel shall be
selected by Indemnitee (unless Indemnitee shall request that such selection be
made by the Board of Directors, in which event the preceding sentence shall
apply), and Indemnitee shall give written notice to the Company advising it of
the identity of the Independent Counsel so selected. In either event,
Indemnitee or the Company, as the case may be, may within 7 days after such
written notice of selection shall have been given, deliver to the Company or to
Indemnitee, as the case may be, a written objection to such selection. Such
objection may be asserted only on the ground that the Independent Counsel so
selected does not meet the requirements of "Independent Counsel" as defined in
Section 13 of this Agreement, and the objection shall set forth with
particularity the factual basis of such assertion. If such written objection is
made, the Independent Counsel so selected may not serve as Independent Counsel
unless and until a court has determined that such objection is without merit.
If, within 20 days after submission by Indemnitee of a written request for
indemnification pursuant to Section 7(a) hereof, no Independent Counsel shall
have been selected or if selected, shall have been objected to, in accordance
with this Section 7(c), either the Company or Indemnitee may petition the Court
of Chancery of the State of Delaware or other court of competent jurisdiction
for resolution of any objection which shall have been made by the Company or
Indemnitee to the other's selection of Independent Counsel and/or for the
appointment as Independent Counsel of a person selected by the Court or by such
other person as the Court shall designate, and the person with respect to whom
an objection is favorably resolved or the person so appointed shall act as
Independent Counsel under Section 7(b) hereof. The Company shall pay any and
all reasonable fees and expenses of Independent Counsel incurred by such
Independent Counsel in connection with acting pursuant to Section 7(b) hereof,
and the Company shall pay all reasonable fees and expenses incident to the
procedures of this Section 7(c), regardless of the manner in which such
Independent Counsel was selected or appointed. Upon the due commencement of any
judicial proceeding or arbitration pursuant to Section 9(a)(iii) of this
Agreement, Independent Counsel shall be discharged and relieved of any further
responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).
8. Presumptions and Effect of Certain Proceedings.
----------------------------------------------
(a) If a Change of Control shall have occurred in making a determination
with respect to entitlement to indemnification hereunder, the person, persons or
entity making such determination shall presume that Indemnitee is entitled to
indemnification under this Agreement if Indemnitee has submitted a request for
indemnification in accordance with Section 7(a) of this Agreement, and the
Company shall have the burden of proof to overcome that presumption in
connection with the making by any person, persons or entity of any determination
contrary to that presumption.
(b) If the person, persons or entity empowered or selected under Section 7
of this Agreement to determine whether Indemnitee is entitled to indemnification
shall not have made such determination within 60 days after receipt by the
Company of the request therefor, the requisite determination of entitlement to
indemnification shall be deemed to have been made, and Indemnitee shall be
entitled to such indemnification, absent (i) a misstatement by Indemnitee of a
material fact, or an omission of a material fact necessary to make Indemnitee's
statement not materially misleading, in connection with the request for
indemnification, or (ii) a prohibition of such indemnification under applicable
law; provided, however, that such 60-day period may be extended for a reasonable
time, not to exceed an additional 30 days, if the person, persons or entity
making the determination with respect to entitlement to indemnification in good
faith requires such additional time for the obtaining or evaluating of
<PAGE>
documentation and/or information relating thereto; and provided, further, that
the foregoing provisions of this Section 8(b) shall not apply (i) if the
determination of entitlement to indemnification is to be made by the
shareholders pursuant to Section 7(b) of this Agreement and if (A) within 15
days after receipt by the Company of the request for such determination the
Board of Directors has resolved to submit such determination to the shareholders
for their consideration at an annual meeting thereof to be held within 75 days
after such receipt and such determination is made thereat, (B) a special meeting
of shareholders is called within 15 days after such receipt for the purpose of
making such determination, such meeting is held for such purpose within 60 days
after having been so called and such determination is made thereat, or (ii) if
the determination of entitlement to indemnification is to be made by Independent
Counsel pursuant to Section 7(b) of this Agreement.
(c) The termination of any Proceeding or of any claim, issue or matter
therein by judgment, order, settlement or conviction, or upon a plea of nolo
----
contendere or its equivalent, shall not (except as otherwise expressly provided
- ----------
in this Agreement) of itself adversely affect the right of Indemnitee to
indemnification or create a presumption that Indemnitee did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the Company or, with respect to any criminal Proceeding,
that Indemnitee had reasonable cause to believe that his conduct was unlawful.
9. Remedies of Indemnitee.
----------------------
(a) In the event that (i) a determination is made pursuant to Section 7 of
this Agreement that Indemnitee is not entitled to indemnification under this
Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 6
of this Agreement, (iii) the determination of entitlement to indemnification is
to be made by Independent Counsel pursuant to Section 7(b) of this Agreement and
such determination shall not have been made and delivered in a written opinion
within 90 days after receipt by the Company of the request for indemnification,
(iv) payment of indemnification is not made pursuant to Section 5 of this
Agreement within ten (10) days after receipt by the Company of a written request
therefor, or (v) payment of indemnification is not made within ten (10) days
after a determination has been made that Indemnitee is entitled to
indemnification or such determination is deemed to have been made pursuant to
Section 8 of this Agreement, Indemnitee shall be entitled to an adjudication in
an appropriate court of the State of Delaware, or in any other court of
competent jurisdiction, of his entitlement to such indemnification or
advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an
award in arbitration to be conducted by a single arbitrator pursuant to the
rules of the American Arbitration Association. Indemnitee shall commence such
proceeding seeking an adjudication or an award in arbitration within 180 days
following the date on which Indemnitee first has the right to commence such
proceeding pursuant to this Section 9(a). The Company shall not oppose
Indemnitee's right to seek any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made pursuant to
Section 7 of this Agreement that Indemnitee is not entitled to indemnification,
any judicial proceeding or arbitration commenced pursuant to this Section 9
shall be conducted in all respects as a de novo trial, or arbitration, on the
-- ----
merits and Indemnitee shall not be prejudiced by reason of that adverse
determination. If a Change of Control shall have occurred in any judicial
proceeding or arbitration commenced pursuant to this Section 9, the Company
shall have the burden of proving that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be.
(c) If a determination shall have been made or deemed to have been made
pursuant to Section 7 or 8 of this Agreement that Indemnitee is entitled to
indemnification, the Company shall be bound by such determination in any
judicial proceeding or arbitration commenced pursuant to this Section 9, absent
(i) a misstatement by Indemnitee of a material fact, or an omission of a
material fact necessary to make Indemnitee's statement not materially
misleading, in connection with the request for indemnification, or (ii) a
prohibition of such indemnification under applicable law.
(d) The Company shall be precluded from asserting in any judicial
proceedings or arbitration commenced pursuant to this Section 9 that the
procedures and presumptions of this Agreement are not
<PAGE>
valid, binding and enforceable and shall stipulate in any such court or before
any such arbitrator that the Company is bound by all the provisions of this
Agreement.
(e) In the event that Indemnitee, pursuant to this Section 9, seeks a
judicial adjudication of or an award in arbitration to enforce his rights under,
or to recover damages for breach of, this Agreement, Indemnitee shall be
entitled to recover from the Company, and shall be indemnified by the Company
against, any and all expenses (of the types described in the definition of
Expenses in Section 13 of this Agreement) actually and reasonably incurred by
him in such judicial adjudication or arbitration, but only if he prevails
therein. If it shall be determined in said judicial adjudication or arbitration
that Indemnitee is entitled to receive part but not all of the indemnification
or advancement of expenses sought, the expenses incurred by Indemnitee in
connection with such judicial adjudication or arbitration shall be appropriately
prorated.
10. Security. To the extent requested by the Indemnitee and approved by
--------
the Board, the Company may at any time and from time to time provide security to
the Indemnitee for the Company's obligations hereunder through an irrevocable
bank line of credit, funded trust, or other collateral. Any such security, once
provided to the Indemnitee, may not be revoked or released without the prior
written consent of Indemnitee.
11. Non-Exclusivity; Duration of Agreement, Insurance; Subrogation.
--------------------------------------------------------------
(a) The rights of indemnification and to receive advancement of Expenses
as provided by this Agreement shall not be deemed exclusive of any other rights
to which Indemnitee may at any time be entitled under applicable law, the
Company's certificate of incorporation or by-laws, any other agreement, a vote
of shareholders or a resolution of directors, or otherwise. This Agreement
shall continue until and terminate upon the later of: (a) 10 years after the
date that Indemnitee shall have ceased to serve as a director or officer of the
Company or fiduciary of any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise on which Indemnitee served at
the request of the Company; or (b) the final termination of all pending
Proceedings in respect of which Indemnitee is granted rights of indemnification
or advancement of expenses hereunder and of any proceeding commenced by
Indemnitee pursuant to Section 9 of this Agreement relating thereto. This
Agreement shall be binding upon the Company and its successors and assigns and
shall inure to the benefit of Indemnitee and his heirs, executors and
administrators.
(b) To the extent that the Company maintains an insurance policy or
policies providing liability insurance for directors and officers of the Company
or fiduciaries of any other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise which such person serves at the
request of the Company, Indemnitee shall be covered by such policy or policies
in accordance with its or their terms to the maximum extent of the coverage
available for any such director or officer under such policy or policies.
(c) In the event of any payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee who shall execute all papers required and take all action necessary
to secure such rights including execution of such documents as are necessary to
enable the Company to bring suit to enforce such rights.
(d) The Company shall not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable hereunder if and to the extent that
Indemnitee has otherwise actually received such payment under any insurance
policy, contract, agreement or otherwise.
12. Severability. If any provision or provisions of this Agreement shall
------------
be held to be invalid, illegal or unenforceable for any reason whatsoever: (a)
the validity, legality and enforceability of the remaining provisions of this
Agreement (including, without limitation, each portion of any Section of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall not
in any way be affected or impaired thereby; and (b) to the fullest extent
possible, the provisions of this Agreement (including, without limitation, each
portion of any
<PAGE>
Section of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that is not itself invalid, illegal or unenforceable)
shall be construed so as to give effect to the intent manifested by the
provision held invalid, illegal or unenforceable.
13. Exception to Right of Indemnification or Advancement of Expenses.
----------------------------------------------------------------
Notwithstanding any other provision of this Agreement, Indemnitee shall not be
entitled to indemnification or advancement of Expenses under this Agreement with
respect to any Proceeding, or any claim therein, brought or made by him against
the Company.
14. Definitions. For purposes of this Agreement:
-----------
(a) "Change in Control" means a change in control of the Company of a
nature that would be required to be reported in response to Item 5(f) of
Schedule 14A of Regulation 14A (or in response to any similar item on any
similar schedule or form) promulgated under the Securities Exchange Act of 1934
(the "Act"), whether or not the Company is then subject to such reporting
requirement; provided, however, that, without limitation, such a Change in
Control shall be deemed to have occurred if (i) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Act), directly or indirectly, of
securities of the Company representing 20% or more of the combined voting power
of the Company's then outstanding securities without the prior approval of at
least two-thirds of the members of the Board of Directors in office immediately
prior to such person attaining such percentage interest; (ii) the Company is a
party to a merger, consolidation, sale of assets or other reorganization, or a
proxy contest, as a consequence of which members of the Board of Directors in
office immediately prior to such transaction or event constitute less than a
majority of the Board of Directors thereafter; or (iii) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Board of Directors (including for this purpose any new director whose
election or nomination for election by the Company's shareholders was approved
by a vote of at least two-thirds of the directors then still in office who were
directors at the beginning of such period) cease for any reason to constitute at
least a majority of the Board of Directors.
(b) "Corporate Status" describes the status of a person who is or was or
has agreed to become a director of the Company, or is or was an officer or
fiduciary of the Company or of any other corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise which such person is
or was serving at the request of the Company.
(c) "Disinterested Directors" means a director of the Company who is not
and was not a party to the Proceeding in respect of which indemnification is
sought by Indemnitee.
(d) "Expenses" shall include all reasonable attorneys' fees, retainers,
court costs, transcript costs, fees of experts, travel expenses, duplicating
costs, printing and binding costs, telephone charges, postage, delivery service
fees, and all other disbursements or expenses of the types customarily incurred
in connection with prosecuting, defending, preparing to prosecute or defend or
investigating a Proceeding.
(e) "Independent Counsel" means a law firm, or a member of a law firm,
that is experienced in matters of corporation law and neither presently is, nor
in the past five years has been, retained to represent: (i) the Company or
Indemnitee in any matter material to either such party, or (ii) any other party
to the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term "Independent Counsel" shall not include
any person who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the Company
or Indemnitee in an action to determine Indemnitee's rights under this
Agreement.
(f) "Proceeding" includes any action, suit, arbitration, alternate dispute
resolution mechanism, investigation, administrative hearing or any other
proceeding, whether civil, criminal, administrative or investigative, arising on
or after the date of this Agreement (and regardless of when the Indemnitee's act
<PAGE>
or failure to act occurred), except one initiated by an Indemnitee pursuant to
Section 9 of this Agreement to enforce his rights under this Agreement.
15. Headings. The headings of the paragraphs of this Agreement are
--------
inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.
16. Modification and Waiver. This Agreement may be amended from time to
-----------------------
time to reflect changes in Delaware law or for other reasons. No supplement,
modification or amendment of this Agreement shall be binding unless executed in
writing by both of the parties hereto. No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (whether or not similar) nor shall such waiver constitute a
continuing waiver.
17. Notice by Indemnitee. Indemnitee agrees promptly to notify the
--------------------
Company in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to any Proceeding
or matter which may be subject to indemnification or advancement of Expenses
covered hereunder, provided, however, that the failure to give any such notice
shall not disqualify the Indemnitee from indemnification hereunder.
18. Notices. All notices, requests, demands and other communications
-------
hereunder shall be in writing and shall be deemed to have been duly given if (i)
delivered by hand and receipted for by the party to whom said notice or other
communication shall have been directed, or (ii) mailed by certified or
registered mail with postage prepaid, on the third business day after the date
on which it is so mailed:
(a) If to Indemnitee, to:
Vincenzo Cannatelli, President and CEO
Elsag Bailey, Inc.
375 Park Avenue, Suite 3805
New York, NY 10152
(b) If to the Company, to:
Secretary
Brown & Sharpe Manufacturing Company
Precision Park
200 Frenchtown Road
North Kingstown, RI 02852-1700
or to such other address as may have been furnished to Indemnitee by the Company
or to the Company by Indemnitee, as the case may be.
19. Governing Law. The parties agree that this Agreement shall be
-------------
governed by and construed and enforced in accordance with the laws of the State
of Delaware.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and
as of the day and year first above written.
Attest: Brown & Sharpe Manufacturing Company
By: _______________________ By: ___________________________
Secretary Fred M. Stuber
President & Chief Executive Officer
Indemnitee
_______________________________
Enrico Albareto
Address: Elsag Bailey Inc.
375 Park Avenue, Suite 3805
New York, NY 10152
<PAGE>
EXHIBIT 11
----------
BROWN & SHARPE MANUFACTURING COMPANY
------------------------------------
COMPUTATION OF PER SHARE DATA
-----------------------------
(Dollars in Thousands Except Per Share Data)
<TABLE>
<CAPTION>
Quarter Ended Nine-Months Ended
------------- -----------------
Sep. 30, Oct. 1, Sep. 30, Oct. 1,
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Primary:
Average shares outstanding 8,694,778 5,350,140 8,692,584 5,192,982
Net effect of dilutive stock options
-- based on the treasury stock method
using average market price 84,468 - 28,960 -
--------- --------- --------- ---------
Totals 8,779,246 5,350,140 8,721,544 5,192,982
========= ========= ========= =========
Net income (loss) $ 220 $ (4,615) $ (190) $ (8,857)
========= ========= ========= =========
Per share amount $ .03 $ (.86) $ (.02) $ (1.71)
========= ========= ========= =========
Fully diluted:
Average shares outstanding 8,694,778 5,350,140 8,692,584 5,192,982
Net effect of dilutive stock options
-- based on the treasury stock
method using quarter-end market
price which is greater than
average market price 148,407 - 148,407 -
Assumed conversion of 9 1/4%
convertible subordinated
debentures 571,429 609,523 571,429 609,523
--------- --------- --------- ---------
Totals 9,414,614 5,959,663 9,412,420 5,802,505
========= ========= ========= =========
Net income (loss) $ 220 $ (4,615) $ (190) $ (8,857)
Add 9 1/4% convertible
subordinated debenture
interest, net of federal
income tax effect 260 205 780 722
--------- --------- --------- ---------
Totals $ 480 $ (4,410) $ 590 $ (8,135)
========= ========= ========= =========
Per share amount $ .05 $ (.74) $ .06 $ (1.40)
========= ========= ========= =========
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> DEC-31-1994
<PERIOD-END> SEP-30-1995
<CASH> 5,011
<SECURITIES> 0
<RECEIVABLES> 104,649
<ALLOWANCES> (4,170)
<INVENTORY> 85,558
<CURRENT-ASSETS> 203,200
<PP&E> 144,926
<DEPRECIATION> 92,052
<TOTAL-ASSETS> 281,862
<CURRENT-LIABILITIES> 121,260
<BONDS> 14,000
<COMMON> 8,719
0
0
<OTHER-SE> 72,835
<TOTAL-LIABILITY-AND-EQUITY> 281,862
<SALES> 232,007
<TOTAL-REVENUES> 232,007
<CGS> 162,437
<TOTAL-COSTS> 162,437
<OTHER-EXPENSES> 63,374
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,735
<INCOME-PRETAX> 10
<INCOME-TAX> 200
<INCOME-CONTINUING> (190)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (190)
<EPS-PRIMARY> (0.02)
<EPS-DILUTED> (0.02)
</TABLE>
