<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6[e][2])
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
BROWN & SHARPE MANUFACTURING COMPANY
----------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
--------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the amount on
which the filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
[LETTERHEAD]
March 30, 1996
To the Stockholders:
You are cordially invited to attend the Annual Meeting of Stockholders
of Brown & Sharpe Manufacturing Company to be held on Thursday, May 2, 1996, at
10:00 a.m. at the Company's corporate offices, Precision Park, 200 Frenchtown
Road, North Kingstown, RI.
The accompanying formal Notice of Annual Meeting of Stockholders and
Proxy Statement contain the principal items of business to be considered and
acted upon at the meeting, including information about the Directors of the
Company continuing in office and the three nominees for election as Directors
for three-year terms. In addition to the matters to be formally acted upon,
there will be a report on the progress of the Company and an opportunity for
questions of general interest to the stockholders.
We hope you will be able to attend the meeting, but if you cannot do
so, it is important that your shares be represented. WHETHER OR NOT YOU PLAN TO
PERSONALLY ATTEND THE MEETING, we urge you to mark, sign, date and promptly
return the enclosed proxy card in the return envelope.
Sincerely yours,
/s/Henry D. Sharpe, Jr.
Henry D. Sharpe, Jr.
Chairman of the Board
<PAGE>
BROWN & SHARPE MANUFACTURING COMPANY
Precision Park, 200 Frenchtown Road
North Kingstown, Rhode Island 02852-1700
Telephone (401) 886-2000
____________________
NOTICE OF ANNUAL MEETING
____________________
Notice is hereby given to the stockholders of Brown & Sharpe
Manufacturing Company that the Annual Meeting of stockholders will be held on
Thursday, May 2, 1996, at 10:00 a.m. at the Company's corporate offices,
Precision Park, 200 Frenchtown Road, North Kingstown, Rhode Island, for the
following purposes:
1. To fix the number of Directors at ten and to elect a class of three
Directors, whose names are set forth in the accompanying proxy
statement, to succeed the class whose term expires with this Annual
Meeting of Stockholders, to serve until the 1999 Annual Meeting of
Stockholders and until their successors shall be elected and
qualified.
2 To ratify the appointment by the Board of Directors of the firm of
Ernst & Young L.L.P. as the Company's independent accountants for the
year 1996.
3 To transact such other business that may properly come before the
meeting, and any adjournments thereof.
The Board of Directors has fixed the close of business on Friday,
March 22, 1996, as the record date for determining stockholders entitled to
notice of the meeting and to vote at the meeting, and any adjournments thereof.
A copy of the Company's Annual Report containing financial data and a summary of
operations for 1995 is being mailed to the stockholders with this Proxy
Statement.
In the event you cannot attend the Annual Meeting in person, please
complete and promptly return the Proxy accompanying this Notice in the enclosed
post-paid envelope so that your shares of stock may be represented at the
Meeting. PLEASE BE SURE TO SIGN AND DATE THE PROXY.
By Order of the Board of Directors,
/s/James W. Hayes, III
James W. Hayes, III
Secretary
North Kingstown, Rhode Island
March 30, 1996
<PAGE>
BROWN & SHARPE MANUFACTURING COMPANY
Precision Park, 200 Frenchtown Road
North Kingstown, Rhode Island 02852-1700
Telephone (401) 886-2000
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 2, 1996
This Proxy Statement and the accompanying Proxy is furnished in
connection with the solicitation of proxies on behalf of the Board of Directors
of Brown & Sharpe Manufacturing Company (the "Company") for use at the Company's
Annual Meeting of stockholders (the "Annual Meeting") to be held at the
Company's corporate offices, Precision Park, 200 Frenchtown Road, North
Kingstown, Rhode Island, on Thursday, May 2, 1996, at 10:00 a.m., and at any
adjournments thereof.
Stockholders of record at the close of business on Friday, March 22,
1996, are entitled to receive notice of and to vote at the Annual Meeting. On
that date, the Company had 8,738,425 shares of common stock outstanding
comprised of 8,216,181 shares of Class A Common Stock, $1.00 par value (the
"Class A Stock") and 522,244 shares of Class B Common Stock, $1.00 par value
(the "Class B Stock"). Except as may otherwise be provided by law, each share of
Class A Stock outstanding on the record date entitles the holder thereof to one
vote, and each share of Class B Stock outstanding on the record date entitles
the holder thereof to ten votes. The holders of Class A Stock are entitled to
elect one Director at the Annual Meeting, and such holders voting together with
the holders of Class B Stock as a single class are entitled to elect the
remaining Directors to be elected at the Annual Meeting. Except for the
foregoing and as may otherwise be provided by law, all other actions submitted
to a vote of the stockholders at the meeting will be voted on by the holders of
Class A Stock and Class B Stock voting together as a single class.
Proxies properly executed and returned will be voted at the Annual
Meeting in accordance with any directions noted thereon or, if no direction is
indicated, proxies will be voted FOR the election of the nominees for Directors
set forth herein and FOR the proposal to ratify the selection of independent
accountants described in this Proxy Statement. Proxies will be voted in the
discretion of the holders of the proxy with respect to any other business that
may properly come before the Annual Meeting and all matters incidental to the
conduct of the Annual Meeting.
Any stockholder signing and delivering a proxy may revoke it at any
time before it is voted by delivering to the Secretary of the Company a written
revocation or a duly executed proxy bearing a date later than the date of the
proxy being revoked. Any stockholder personally attending the Annual Meeting may
also revoke his or her proxy and vote his or her shares of stock.
The approximate date this Proxy Statement is being mailed to
stockholders is March 30, 1996.
-1-
<PAGE>
ITEM 1
ELECTION OF DIRECTORS
The Board of Directors proposes to fix the number of Directors at ten;
to designate a class of three Directors to serve until the 1999 Annual Meeting
and until their successors have been duly elected and qualified (the "1999
Class"); and to elect Messrs. John M. Nelson, Vincenzo Cannatelli, and Russell
A. Boss, all of whom are currently members of the Board and who have consented
to stand for election to the 1999 Class. The Board has nominated Mr. Cannatelli
for election by the holders of Class A Stock and Messrs. Nelson and Boss for
election by the holders of Class A Stock and Class B Stock, voting together as a
single class.
Information is furnished below with respect to the nominees for
election to the 1999 Class as well as the Directors continuing in office. Henry
D. Sharpe, III is the son of Henry D. Sharpe, Jr., the Chairman of the Board.
Mr. Vincenzo Cannatelli, a nominee for election to office, and Messrs. Alberto
de Benedictis and Enrico Albareto are all senior executive officers of
Finmeccanica S.p.A. and its Elsag Bailey Division ("Finmeccanica"), an Italian
company and a major shareholder in the Company and controlling stockholder of
the Company, or Finmeccanica's affiliate, Elsag Bailey Process Automation N.V.,
a Dutch company. See the discussion beginning on Page 5 relating to Security
Ownership of Certain Beneficial Owners and Management and on Page 16 relating to
Certain Relationships and Related Transactions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION
OF MESSRS. NELSON, CANNATELLI, AND BOSS.
<TABLE>
<CAPTION>
YEAR FIRST PRINCIPAL OCCUPATION DURING LAST FIVE
ELECTED A YEARS AND DIRECTORSHIPS IN PUBLIC
NAME (AGE) DIRECTOR REPORTING AND OTHER COMPANIES
- ---------- -------- -----------------------------
<S> <C> <C>
Nominees for Election to Office
- -------------------------------
For Terms Expiring 1999
John M. Nelson (64) 1975 Chairman of the Board, Wyman-Gordon Company, Worcester,
MA, manufacturer of forgings and castings, since May 1994
and Chairman and Chief Executive Officer from May 1991 to
May 1994; Chairman of the Board, The TJX Companies, Inc., an
off price specialty apparel retailer, since June 1995; until
October 1990, Chairman of the Board and Chief Executive
Officer, Norton Company, Worcester, MA, manufacturer of
abrasive and ceramic products; Director, Cambridge Biotech
Company, a biotechnology firm; Director, Commerce Holdings
Inc., a holding company for a property and casualty
insurance company; and, Director, Stocker & Yale
Manufacturing Company, a specialty products company.
Vincenzo Cannatelli (43) 1994 Managing Director and Chief Executive Officer, Elsag Bailey
Process Automation N.V., a Dutch company, manufacturer of
automated process control systems and devices, since
November 1993; Managing Director, Hartmann & Braun A. G., a
German corporation, a manufacturer of industrial process
controls and field instrumentation equipment, since January
1996; prior to 1993 Group Executive Vice President Elsag
Bailey Inc., an affiliate of Finmeccanica S.p.A.
Russell A. Boss (57) 1990 President and Chief Executive Officer and a Director, A. T.
Cross Company, Lincoln, RI, manufacturer of fine writing
instruments.
</TABLE>
-2-
<PAGE>
<TABLE>
<CAPTION>
YEAR FIRST
ELECTED A PRINCIPAL OCCUPATION DURING LAST FIVE YEARS AND
NAME (AGE) DIRECTOR DIRECTORSHIPS IN PUBLIC REPORTING AND OTHER COMPANIES
---------- -------- -----------------------------------------------------
<S> <C> <C>
Directors Continuing in Office
- ------------------------------
Terms Expiring 1998
Henry D. Sharpe, Jr. (72) 1949 Director and Chairman of the Board of Directors of the Company.
Howard K. Fuguet (58) 1990 Partner of the law firm of Ropes & Gray, Boston, MA.
Enrico Albareto (66) 1994 Chief Executive Officer, Elsag Bailey Division of Finmeccanica
S.p.A., Genoa, Italy, manufacturer of automated process control
systems and devices.
Henry D. Sharpe, III (41) 1992 Co-founder and Technical Director, Design Lab, Inc.,
Providence, RI, a multi-disciplinary product design firm
specializing in research and design of new products, re-design
of existing products, and engineering management services.
Terms Expiring 1997
Frank T. Curtin (61) 1995 President and Chief Executive Officer and a Director of the
Company since May 2, 1995; from 1992 to May 1995, Vice
President, National Center for Manufacturing Sciences, a
research and development organization, Ann Arbor, MI; from 1989
to May 1995, President, Curtin & Associates, a software
development company, Santa Barbara, CA and Ann Arbor, MI.
Alberto de Benedictis (43) 1994 Senior Vice President, Corporate Development, Finmeccanica
S.p.A., Rome, Italy, since February 1995, manufacturer of
products for the aerospace, energy, transportation automation
and defense industries; Director, Union Switch & Signal, Inc.,
a manufacturer of railway signaling systems; Director, Elsag
Bailey Process Automation N.V.; Director, Concentra Corp., a
developer of CAD software.
Paul R. Tregurtha (60) 1984 Chairman of the Board and Chief Executive Officer, Mormac
Marine Group, Inc., Stamford, CT, a marine transportation
company; Director, Fleet Financial Group, Inc., a bank holding
company; Director, FPL Group, Inc., a utility company; Trustee,
Teachers Insurance and Annuity Assoc.; Chairman, Moran
Transportation Company, and Vice Chairman, Interlake Steamship
Company, Greenwich, CT, both marine transportation companies.
</TABLE>
-3-
<PAGE>
GENERAL INFORMATION
RELATING TO THE BOARD OF DIRECTORS
The Board of Directors, which held five regular meetings and two
special meetings in 1995, maintains a standing Executive Committee, composed of
Messrs. Sharpe, Jr., Curtin, Boss, Cannatelli, and Tregurtha, which has
substantially all of the powers and authority of the Board of Directors when the
full Board is not in session. The Executive Committee did not meet in 1995. The
Board of Directors also maintains standing committees on audit ("Audit
Committee"), corporate development ("Corporate Development Committee") and
compensation ("Salary Committee"), each of which is composed exclusively of non-
employee Directors. The Board does not have a standing Nominating Committee.
During 1995, each of the Directors, except for Mr. Albareto, participated in 75%
or more of the aggregate number of meetings of the Board and of the committees
on which he is a member.
The Audit Committee, whose members are Messrs. Fuguet, Sharpe III,
Nelson, and de Benedictis recommends to the Board of Directors, for approval by
the stockholders, the appointment of a firm of independent certified public
accountants to audit the Company's financial statements. The Audit Committee
also meets with the independent accountants and the Company's Chief Financial
Officer to review the scope and results of the audit, the scope of audit and
non-audit services, the range of audit and non-audit fees, any proposed changes
in accounting policies, practices, or procedures, including those relating to
the Company's internal accounting controls, and the Company's financial
statements to be included in the Company's Annual Report to Stockholders and
other related matters. The Audit Committee met four time in 1995.
The Corporate Development Committee, whose members are Messrs. Curtin,
Fuguet and Tregurtha, considers matters concerning the relationship between the
Company and its stockholders, including offers to purchase outstanding Company
stock, acquisition proposals, and other matters which could affect the existence
of the Company as an independent company or otherwise affect the control of the
Company. The Corporate Development Committee did not hold any meetings in 1995.
The Salary Committee, whose members are Messrs. Boss, Tregurtha,
Nelson and de Benedictis performs a periodic review of the appropriate salaries
and compensation plans for the Executive Officers and other key management
personnel of the Company and administers the Amended Profit Incentive Plan, the
1989 Equity Incentive Plan, and the Key Employees' Long-Term Deferred Cash
Incentive Plan. The Salary Committee met fourteen times in 1995, including
meetings to conduct a search for a successor to Mr. Fred M. Stuber, who resigned
as President and Chief Executive Officer of the Corporation on May 2, 1995. See
"Compensation Committee Report".
As compensation for services rendered during 1995, the Company paid
each non-employee Director an annual retainer of $10,000 (except the Chairman of
the Board, who was paid $15,000), a fee of $800 for each Board meeting attended,
a fee of $400 for each teleconference meeting which lasted more than one-half
hour in duration, and a fee of $500 for each Committee meeting attended ($200 if
held on the same day as a Board meeting). Directors who are members of the Audit
Committee also receive an additional $1,000 in their annual retainer fee.
Mr. Tregurtha has elected to defer 50% of his Director's fees under a
deferred stock equivalent unit contract with the Company dated September 3, 1987
pursuant to which all fees earned after that date were to be converted into
deferred stock equivalent units based on the market value of the Company's stock
on each fee payment date. Under such contract dividend equivalents in amounts
and timing equal to any cash dividends paid on the Company's outstanding stock
are similarly converted into additional stock equivalent units. The Company paid
no cash dividends on its stock in 1995. Mr. Tregurtha's contract matures on
October 1, 2005 or the earlier date of death or other termination of Mr.
Tregurtha as a Director. The contract was amended in 1992 to provide that fee
amounts
-4-
<PAGE>
deferred after May 1, 1991 (including any dividend equivalent amounts) shall be
payable on maturity only in cash, with amounts deferred prior to such date
payable in cash or shares.
The law firm of Ropes & Gray, Boston, Massachusetts, of which Mr.
Fuguet is a partner, has provided legal services to the Company since 1957.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
I. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Set forth below as of December 31, 1995 are the persons or groups
known to the Company who beneficially own, under the applicable rules and
regulations of the Securities and Exchange Commission, more than 5% of any class
of the Company's voting securities.
<TABLE>
<CAPTION>
PERCENT OF
NAME AND ADDRESS TITLE OF CLASS AMOUNT AND NATURE PERCENT COMBINED
OF BENEFICIAL OWNER OF COMMON STOCK OF BENEFICIAL OWNERSHIP OF CLASS VOTING POWER
- ------------------- --------------- ----------------------- -------- ------------
Direct Indirect
------ --------
<S> <C> <C> <C> <C> <C>
Finmeccanica S.p.A./(1)/ Class A 3,450,000 -- 41.9% 25.6%
Viale Marescialo Class B -- -- --
Pilsudski 92
Rome 00197 Italy
Fiduciary Trust Company Class A 476,766 -- 5.8% 15.3%
International/(2)/ Class B 158,920 -- 30.4%
Two World Trade Center
New York, NY 10048-0774
Henry D. Sharpe, Jr./(3)/ Class A 619,610 7,200 7.6% 24.8%
c/o Brown & Sharpe Class B 268,919 2,400 51.9%
Manufacturing Company
200 Frenchtown Road
Precision Park
N. Kingstown, RI 02852-1700
Frank T. Curtin/(4)/ Class A 511,040 -- 6.2% 16.1%
c/o Brown & Sharpe Class B 166,063 -- 31.7%
Manufacturing Company
200 Frenchtown Road
Precision Park
N. Kingstown, RI 02852-1700
Charles A. Junkunc/(4) / Class A 469,964 -- 5.7% 20.1%
c/o Brown & Sharpe Class B 223,127 -- 42.7%
Manufacturing Company
200 Frenchtown Road
Precision Park
N. Kingstown, RI 02852-1700
The Killen Group, Inc./(5)/ Class A 422,610 3,832 5.1% 3.1%
1189 Lancaster Avenue Class B -- -- --
Berwyn, PA 19312
</TABLE>
-5-
<PAGE>
<TABLE>
<CAPTION>
PERCENT OF
NAME AND ADDRESS TITLE OF CLASS AMOUNT AND NATURE PERCENT COMBINED
OF BENEFICIAL OWNER OF COMMON STOCK OF BENEFICIAL OWNERSHIP OF CLASS VOTING POWER
- ------------------- --------------- ----------------------- -------- ------------
Direct Indirect
------ --------
<S> <C> <C> <C> <C> <C>
Donald Smith & Co., Inc./(6)/ Class A 419,600 -- 5.1% 3.1%
15 Essex Road Class B -- -- --
Paramus, NJ 07652
Fleet Investment Services/(7)/ Class A 166,510 -- 2.0% 5.1%
100 Westminster Street Class B 52,744 -- 10.0%
Providence, RI 02903
</TABLE>
_____________________________
/(1)/ Finmeccanica S.p.A., an Italian corporation, owns beneficially and of
record and has the power to vote or direct the vote and to dispose or
direct the disposition of 3,450,000 shares of Class A Stock, amounting to
41.9% of such class and representing 25.6% of the combined voting power
of Class A and Class B Stock. The Class A stock was acquired in
connection with the acquisition by the Company of the DEA S.p.A.
metrology business on September 28, 1994. Approximately 63% of
Finmeccanica S.p.A.'s stock is owned by Istituto per la Ricostruzione
Industriale S.p.A., a joint stock company ("IRI"), all of whose stock is
held by the Ministry of the Treasury of the Republic of Italy; and
therefore, Finmeccanica and IRI are deemed to share the voting and
investment power with respect to the shares held by Finmeccanica. (See
discussion Certain Relationships and Related Transactions)
/(2)/ Fiduciary Trust Company International, a bank, by virtue of various
investment management contracts and trust agreements with members of the
Sharpe family, shares voting and dispositive power with respect to the
aforementioned shares of Class A and Class B Stock. See Footnote (3)
below.
/(3)/ Various members of the Sharpe family, including Henry D. Sharpe, Jr. and
Henry D. Sharpe, III, beneficially owned an aggregate of 795,006 shares
of Class A Stock and 327,383 shares of Class B Stock of the Company,
amounting to 9.6% and 62.6%, respectively, of each class of stock and
representing 30.2% of the combined voting power of the Class A Stock and
Class B Stock. The table, however, excludes (a) 168,076 shares of Class A
Stock and 56,024 shares of Class B Stock held by Henry D. Sharpe, Jr.'s
wife and children and by trusts, of which they are beneficiaries and of
which beneficial ownership is disclaimed; and (b) 120 shares of Class A
Stock and 40 shares of Class B Stock held by the Sharpe Family
Foundation, a charitable foundation, of which beneficial ownership is
disclaimed. The table includes (i) 7,200 shares of Class A Stock and
2,400 shares of Class B Stock as to which Henry D. Sharpe, Jr. has
neither voting nor dispositive power but as to which he is a beneficiary
under a trust established under the will of Henry D. Sharpe, Sr.; (ii)
311,040 shares of Class A Stock and 166,063 shares of Class B Stock as to
which Mr. Sharpe, by virtue of being one of the three Trustees under the
Company's Employee Stock Ownership and Profit Participation Plan (the
"ESOP"), has shared voting power (subject to direction from plan
participants) and limited residual investment power as a Trustee under
the terms of the Trust Agreement for the ESOP and of which beneficial
ownership is disclaimed; and (iii) 308,570 shares of Class A Stock and
102,856 shares of Class B Stock as to which Henry D. Sharpe, Jr. has
shared voting and dispositive power with Fiduciary Trust Company
International with respect to the shares of Class A Stock and Class B
Stock described in sub-clause (a) above, and sole voting and dispositive
power with respect to the shares of Class A Stock and Class B Stock
described in clause (b) above.
/(4)/ Includes (i) 311,040 shares of Class A Stock and 166,063 shares of Class
B Stock, which, by virtue of Messrs. Curtin and Junkunc's roles as
Trustees of the ESOP, are deemed to be beneficially owned but as to all
of which ESOP shares (except, with respect to Mr. Junkunc, his vested
shares of Class A Stock and Class B Stock in such plan) they disclaim
beneficial ownership; (ii) shares of Class A Stock issuable upon exercise
of incentive stock options held by such Executive Officers. (See Footnote
(3) on Page 8 and Aggregated Options Table on Page 14.); and (iii) with
respect to Mr. Junkunc, includes 36,167 shares of Class A Stock and
28,333 shares of Class B Stock held by the Company's United Kingdom
Pension Plan as to which Mr. Junkunc has shared voting and investment
power with respect to which Mr. Junkunc disclaims beneficial ownership.
/(5)/ The Killen Group, Inc., a registered investment advisor, owns
beneficially 426,442 shares of Class A stock, of which it has sole voting
power over 173,713 shares and sole dispositive power with respect to
422,610 shares. Robert E. Killen, President and sole stockholder of the
Killen Group, directly owns 3,832 shares of Class A stock, as to which he
has sole voting and dispositive power.
/(6)/ Donald Smith & Co. is an investment advisory firm which has sole voting
power over 294,300 shares of Class A Stock and has sole dispositive power
over 419,600 shares of Class A Stock.
-6-
<PAGE>
(Footnote cont'd from previous page)
/(7)/ Fleet Investment Services, an affiliate of Fleet Financial Group, Inc.,
acts as Trustee of the Brown & Sharpe Savings and Retirement Plan and the
Brown & Sharpe Savings and Retirement Plan for Management Employees,
substantially similar tax qualified 401K savings plans covering U.S.
employees (together the "SARP"), and in that capacity shares voting power
with respect to the shares of Class A Stock and Class B Stock, subject to
direction from participants in such SARP Plan as to all of which Fleet
disclaims beneficial ownership.
II. SECURITY OWNERSHIP OF MANAGEMENT
The following table and accompanying footnotes set forth certain
information about the beneficial ownership of the Company's Class A Stock and
Class B Stock as of March 15, 1996 by the Directors and Nominees and certain
named Executive Officers included in the Summary Compensation Table and all
Directors and Executive Officers as a group.
<TABLE>
<CAPTION>
PERCENT OF
NAME AND ADDRESS TITLE OF CLASS AMOUNT AND NATURE PERCENT COMBINED
OF BENEFICIAL OWNER OF COMMON STOCK OF BENEFICIAL OWNERSHIP OF CLASS VOTING POWER
- ------------------- --------------- ----------------------- -------- ------------
Direct Indirect
------ --------
<S> <C> <C> <C> <C> <C>
Enrico Albareto/(1)/ Class A 3,450,000 -- 41.9% 25.6%
Class B -- -- --
Vincenzo Cannatelli/(1)/ Class A 3,450,000 -- 41.9% 25.6%
Class B -- -- --
Alberto de Benedictis/(1)/ Class A 3,450,000 -- 41.9% 25.6%
Class B -- -- -- --
Henry D. Sharpe, Jr./(2)/ Class A 619,610 7,200 7.6% 24.8%
Class B 268,919 2,400 51.9%
Frank T. Curtin/(2)/ Class A 511,040 -- 6.2% 16.1%
Class B 166,063 -- 31.7%
Henry D. Sharpe, III Class A 55,145 -- * 1.7%
Class B 18,381 -- 3.5%
John M. Nelson Class A 1,453 -- * *
Class B 151 -- *
Howard K. Fuguet Class A 1,000 -- * *
Class B -- -- --
Russell A. Boss Class A 1,000 -- * *
Class B -- -- --
Paul R. Tregurtha Class A 705 -- * *
Class B 13 -- *
Charles A. Junkunc/(2)/ Class A 469,964 -- 5.7% 20.1%
Class B 223,127 -- 42.7%
Richard F. Paolino Class A 103,561 -- * *
Class B 2,429 -- *
</TABLE>
-7-
<PAGE>
<TABLE>
<CAPTION>
PERCENT OF
NAME AND ADDRESS TITLE OF CLASS AMOUNT AND NATURE PERCENT COMBINED
OF BENEFICIAL OWNER OF COMMON STOCK OF BENEFICIAL OWNERSHIP OF CLASS VOTING POWER
- ------------------- --------------- ----------------------- -------- ------------
Direct Indirect
------ ----------
<S> <C> <C> <C> <C> <C>
Antonio Aparicio Class A 70,000 -- * *
Class B -- -- --
C. John Cooke Class A 36,000 -- * *
Class B -- -- --
All Directors, Nominees and Class A 4,882,633 7,200 59.5% 62.8%
Executive Officers as a
Group (17 persons)/(3)/ Class B 353,480 2,400 68.1%
</TABLE>
*Less than one percent (1%).
_____________________________
/(1)/ Messrs. Albareto, Cannatelli and de Benedictis, by virtue of their
ositions as senior executives and employees of Finmeccanica S.p.A. or its
affiliates and Finmeccanica's authority to vote or direct the vote and to
dispose or direct the disposition of the Finmeccanica Class A Stock, may
each be deemed to beneficially own the shares of Class A Stock owned of
record by Finmeccanica and as to all of which stock they disclaim
ownership. See Footnote (1) to I. Security Ownership of Certain Beneficial
Owners, and discussion under Certain Relationships and Related
Transactions.
/(2)/ See Footnotes (3) and (4) to I. Security Ownership of Certain Beneficial
Owners.
/(3)/ With respect to Executive Officers who are not Directors, includes 77,200
shares of Class A Stock as to which certain of the Executive Officers have
sole voting and investment power; 36,167 shares of Class A Stock and
28,333 shares of Class B Stock held in the Company's pension plan covering
its United Kingdom employees as to which an Executive Officer has shared
voting and investment power; and 4,679 vested shares of Class A Stock and
2,827 vested shares of Class B Stock as to which the Executive Officers
have shared voting power in the SARP and ESOP. Includes 527,332 shares of
Class A Stock subject to either presently or future exercisable stock
options granted to the named Executive Officers and other Executive
Officers pursuant to the Company's Amended 1973 Stock Option Plan (under
which no further awards can be made) and 1989 Equity Incentive Plan. (See
Options and SAR Table on Page 9under the heading "Executive
Compensation".)
COMPENSATION COMMITTEE REPORT
The Salary Committee of the Board of Directors (the "Committee")
presents its report on executive compensation for the year 1995. The Committee
is composed of four outside Directors of the Company, Messrs. Boss, de
Benedictis, Nelson, and Tregurtha, who have no interlocking relationships within
the meaning of regulations of the Securities and Exchange Commission applicable
to compensation committees, and is responsible for reviewing and establishing
the compensation of the Company's Executive Officers. The Committee reports
these actions to the Board of Directors. The Committee also administers the
Company's cash bonus and stock-based award plans: the Amended Profit Incentive
Plan, the 1989 Equity Incentive Plan, and, commencing with performance in the
year 1995, the Company's Key Employees' Long-Term Deferred Cash Incentive Plan.
General Compensation Policy
- ---------------------------
Following the combination with DEA S.p.A. in late 1994, the Committee
obtained independent consulting assistance in early 1995 with respect to
-8-
<PAGE>
executive management compensation. The Committee, together with the Board,
hired a new President and Chief Executive Officer in May, 1995 and later
approved the hiring of two additional executive officers to head the DEA
operations and the North Kingstown Measuring Systems operations, respectively,
and a related reorganization of the Company's executive management.
Significant grants of stock options were made by the Salary Committee
to the new Chief Executive Officer and to other executive officers in 1995 (in
some cases supplementing 1994 grants) under the Equity Incentive Plan so that,
if the executive management team succeeded in significantly improving the
Company's results, they would share with stockholders in any appreciated market
price for the Company's stock. The Committee recommended to the Board and the
Board approved at its February 1996 Meeting a new long-term cash plan, the "Key
Employees' Long-Term Deferred Cash Incentive Plan", with annual awards keyed to
a percentage of adjusted pre-tax income such that, if larger dollar awards
resulted in the future, the greater net income for such years should also
enhance stockholder value, but payable in cash and with a delayed three year
vesting subject to acceleration upon a change of control as defined with respect
to each year's award, and with deferral of funding and payments until retirement
or other termination of employment. Upon adoption of the Long-Term Deferred
Cash Incentive Plan, with effect as of January 1, 1995, the Committee approved
awards for the year 1995 under the Plan.
These four elements (the base salaries and the three plans), the last
two of which are long-term incentives and provide "at-risk" compensation, are
intended to make the Company's executive management compensation program
competitive in the capital goods industry, and to offer compensation
opportunities to executive management more linked to the Company's business
objectives, bottom line performance, and enhanced shareholder value. The
program is intended to enable the Company to attract, retain, and motivate the
executive management talent necessary to enable the Company to achieve long-term
growth.
Components of Executive Compensation
- ------------------------------------
Base Salary. Under the Committee's guidance, the base salary of each
of the Company's Executive Officers is set through a combination of market
forces and an objective evaluation of the position's value and is reviewed
annually. The salaries of Mr. Curtin, the CEO, and two other Executive Officers
also hired in 1995 were fixed at the time of hiring through individual
negotiation and were consistent with the general salary range for comparable
positions at similar size companies or divisions within the industry. Executive
Officer salaries for 1996 were voted by the Committee at its February, 1996
meeting, generally reflecting increases based on performance and the improvement
in the Company's 1995 results.
Short-Term Performance Bonuses. Under the Company's Amended Profit
Incentive Plan ("PIP"), Executive officers are eligible to receive a planned
annual cash bonus of up to a specified percentage (generally 30% to 40% for
Executive Officers) of base salary. At the beginning of each fiscal year, the
Committee establishes for each executive a maximum aggregate percentage bonus
opportunity (generally 60% for executive officers), which is comprised of
separate bonus categories tied to the satisfaction of a specified, largely
quantitative formula of corporation goals (e.g., net income and achievement of
specific objectives). In order to assure that the PIP would effectively
encourage and reward superior performance, the Committee in early 1996
restructured the specific performance targets comprising the overall formula for
the Executive Officers to focus their content on promoting cross-divisional and
inter-Company cooperation and also focusing on net income and various
determinants of cash flow. In addition, up to 30% of certain executives' annual
bonuses, including up to 30% for the Chief Executive Officer for 1996 (for 1995
the CEO's bonus was fixed in his May, 1995 employment agreement), were
independent of the target formula and instead were subject to award at the
discretion of the Committee. Bonuses under the PIP for performance in 1995 were
made to a total of 69 executives, including Executive Officers (other than the
Chief Executive Officer), in the aggregate. (See information shown in the
Summary Compensation Table.)
-9-
<PAGE>
Long-Term Incentive Awards. This component of executive compensation
consists of (i) the 1989 Equity Inventive Plan ("EIP"), pursuant to which the
Company may make awards of stock options, restricted stock, performance cash
awards and other stock-based awards, and (ii) the 1995 Key Employees' Long-Term
Deferred Cash Incentive Plan (the "LTDCIP"), pursuant to which the Company may
make annual deferred cash awards, vesting in three years after award, of a
"pool" calculated as a percentage (6%) of adjusted consolidated pre-tax
earnings. These plans align the interest of executive management most closely
with those of the Company's stockholders. The four year vesting schedules for
stock options (five years for restricted stock, none of which was granted in
1995), are expected to provide significant incentives both for superior
performance and to encourage the executives to remain with the Company through a
difficult operating period. Finally, the use of stock awards under the EIP
permits the accomplishment of these objectives with potential advantageous tax
and accounting treatment for the Company and the employee as compared to cash
awards. Recognizing the importance of longer-term stock-based awards to the
alignment of the interests of management with those of the stockholders,
particularly following the 1994 acquisition of DEA and the "turn-around nature"
of the Company's operating situation, the Committee believes it was appropriate
in 1995 to make significant longer-term stock option grants under the EIP in
1995 and to implement the program for long-term cash awards under the LTDCIP.
In 1995 the Committee made significant stock option grants to eight
Executive Officers and thirty-four other employees (See Table "Options/SAR
Grants in Last Fiscal Year"). In February, 1996, the Committee made long-term
deferred cash awards for 1995 performance under the LTDCIP to a total of eight
Executive Officers, as shown in the Summary Compensation Table. These awards
vest at December 31, 1998 if the employee remains with the Company, subject to
certain exemptions noted in the LTDCIP.
1995 Compensation of Chief Executive Officer
- --------------------------------------------
The Company hired Frank T. Curtin as President and CEO and, after
extensive advice of an executive search firm and other relevant factors, entered
into a three-year employment agreement with him on May 2, 1995. Pursuant to the
agreement, Mr. Curtin's base salary during 1995 was set at the annual rate of
$300,000 (his base salary this year was raised to $315,000 for 1996) plus a
fixed incentive bonus for 1995 of $75,000 and 10% contribution to a supplemental
executive retirement plan and a provision for an incentive bonus for later years
up to the maximum provided in the PIP in the discretion of the Committee. The
agreement also provided for the grant of options of 200,000 shares of Class A
common stock at fair market value on May 3, 1995. Mr. Curtin received a
deferred cash award for 1995 under the LTDCIP. Details of Mr. Curtin's
compensation are set forth in the various compensation tables and in the text
under "Employment, Severance, and Other Agreements".
The Committee believes that the compensation package for Mr. Curtin
was equitable and, in particular that the stock option grant of 200,000 shares
was in the best interest of the Company at this "turn-around" juncture.
1995 compensation for Mr. Stuber, CEO of the Company until his
resignation and subsequent termination of employment of May 31, 1995, was kept
at the monthly rate of his 1994 compensation. The Company and Mr. Stuber
entered into a Severance Agreement providing for payment to him of the
equivalent of $576,372 during 1995 and a covenant not to compete for two years
until May 30, 1997.
Russell A. Boss, Chairman
John M. Nelson
Paul R. Tregurtha
Alberto de Benedictis
-10-
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the annual and long-term compensation
during each of the Company's last three fiscal years for Mr. Frank T. Curtin,
the Company's President and Chief Executive Officer, the four other highest-paid
Executive Officers (as such term is defined under rules promulgated under the
Securities and Exchange Act of 1934) whose earned compensation exceeded $100,000
in 1995 for each such person, and compensation for Mr. Fred M. Stuber, who
served as the Company's President and Chief Executive Officer until May 2, 1995.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation
- ---------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
Other
Annual
Name and Compen-
Principal Position Year Salary ($) Bonus ($) sation ($)
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Frank T. Curtin/(5)/ 1995 193,846 75,000 71,937
President and Chief 1994 -- -- --
Executive Officer 1993 -- -- --
Charles A. Junkunc 1995 190,000 38,475 --
Vice President and 1994 190,000 19,000 --
Chief Financial Officer 1993 178,369 46,720 --
Richard F. Paolino 1995 214,230 44,550 --
Vice President - 1994 190,000 19,000 --
Commercial Operations 1993 178,369 42,473 --
Antonio Aparicio/(1)/ 1995 251,256 49,687 --
Vice President - 1994 216,962 16,500 --
Precision Measuring 1993 182,601 41,376 --
Instruments
C. John Cooke/(1)/ 1995 123,232 24,955 --
Vice President - 1994 119,592 8,250 --
Custom Metrology 1993 110,903 22,134 --
Fred M. Stuber/(1)(6)/ 1995 155,653 -- --
President and Chief 1994 320,742 19,000 --
Executive Officer 1993 285,811 50,000 --
<CAPTION>
Long-Term Compensation Awards
-----------------------------
Awards Pay-outs
- -----------------------------------------------------------------------------------------------------------
(a) (b) (f) (g) (h) (i)
Restricted Securities
Stock Underlying All Other
Name and Award(s) Options/ LTIP Compen-
Principal Position Year ($)/(7)/ SARs (#) Payouts ($) sation ($)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Frank T. Curtin/(5)/ 1995 -- 200,000 -- 44,886/(4)(8)/
President and Chief 1994 -- -- -- --
Executive Officer 1993 -- -- -- --
Charles A. Junkunc 1995 -- 40,000 -- 43,674/(3)(4)(8)/
Vice President and 1994 39,000 25,000 -- 21,247/(3)(4)/
Chief Financial Officer 1993 -- -- -- 7,719/(3)/
Richard F. Paolino 1995 -- 30,000 -- 49,257/(3)(4)(8)/
Vice President - 1994 -- 25,000 -- 20,854/(3)(4)/
Commercial Operations 1993 -- -- -- 15,532/(3)/
Antonio Aparicio/(1)/ 1995 -- 33,000 66,956/(2)(8)/
Vice President - 1994 26,000 25,000 -- 18,904/(2)/
Precision Measuring 1993 -- -- -- 15,209/(2)/
Instruments
C. John Cooke/(1)/ 1995 -- 15,000 -- 16,212/(8)/
Vice President - 1994 -- 15,000 -- --
Custom Metrology 1993 -- -- -- --
Fred M. Stuber/(1)(6)/ 1995 -- -- 592,079/(6)/
President and Chief 1994 -- 40,000 -- 31,125/(2)/
Executive Officer 1993 -- -- -- 28,009/(2)/
</TABLE>
______________________
/(1)/ Amounts shown converted from Swiss Franc equivalent with respect to
Messrs. Stuber and Aparicio for 1995, 1994, and 1993 at the average U.S.
dollar exchange rates of $.8461, $.7332, and $.6759, respectively, and
from British pound equivalent with respect to Mr. Cooke for 1995, 1994,
and 1993 at the average U.S. dollar exchange rates of $1.5799, $1.5332,
and $1.4987, respectively.
/(2)/ Contributions made to the Company's Swiss subsidiary, Tesa - Brown &
Sharpe S.A.'s, retirement plans for Messrs. Stuber and Aparicio and with
respect to Mr. Aparicio for 1995 includes Swiss Franc contributions to
such Tesa retirement plans in the equivalent amount of $36,346 and to
Leitz Messtechnik GmbH retirement plan for Mr. Lenz.
-11-
<PAGE>
(Footnotes cont'd. from previous page)
/(3)/ Includes values of 1993, 1994, and 1995 year-end Company contributions to
the named Executive Officers' SARP (4% cash contribution) and ESOP (2% in
shares of Class A Stock), and with respect to Mr. Junkunc for 1993
reflects eligible wage participation for approximately six months, and for
1994 and 1995 also includes amounts contributed to an unfunded non-
qualified deferred compensation Supplemental Executive Retirement Plan
("SERP") account maintained by the Company for Messrs. Junkunc and
Paolino. (see footnote 4).
/(4)/ Includes amounts of $6,937 and $6,629 for 1994 and $6,446 and $8,842
including interest for 1995 for Messrs. Junkunc and Paolino, respectively
and an amount of $19,384 for Mr. Curtin, provided under his Employment
Agreement (see Page 15), representing retirement benefits provided in
excess of limitations imposed by the Internal Revenue Code on Company
contributions to the named executives' SARP and ESOP retirement accounts,
which are credited to an unfunded deferred compensation retirement plan
account under the SERP.
/(5)/ Mr. Curtin commenced his employment with the Company on May 2, 1995. The
salary shown in Column (c) was the amount paid to him from his
commencement date of employment through December 31, 1995. The bonus
amount in Column (d) was guaranteed, for the 1995 "short" year only, under
his Employment Agreement and the amount in Column (e) represents payment
of relocation and moving expenses.
/(6)/ Mr. Stuber resigned from the Company on May 31, 1995. The salary shown was
paid to him from January 1, 1995 through the date of his resignation. The
amount shown in column (i) represents a severance payment made to him and
amounts contributed to the Tesa-Brown & Sharpe S.A. retirement plan for
his service during 1995. See Employment, Severance and Other Arrangements.
/(7)/ The table indicates the dollar value at the date of the award of
restricted stock. The table set forth below provides information relating
to unvested restricted stock awarded to and held by the Executive Officers
listed in the above table:
<TABLE>
<CAPTION>
Total Number Restricted Aggregate Market Value
Unvested Shares Held Restricted Unvested Shares
Name as of Fiscal Year-End* Held as at Fiscal Year-End
---- ---------------------- --------------------------
<S> <C> <C>
Charles A. Junkunc 14,000 $143,500
Richard F. Paolino 10,000 103,525
Antonio Aparicio 12,000 123,000
C. John Cooke 8,000 82,000
</TABLE>
/*/ The awards to Messrs. Paolino and Cooke were made in 1992 and the awards
to Messrs. Junkunc and Aparicio were made in 1992 and 1994. The award to
Mr. Lenz was made in 1993. Restrictions lapse ratably over five (5) years
from the date of award with 25% of the shares awarded vesting two years
and three years, respectively, after such date and the remaining 50% of
the shares vesting five (5) years after such date. The Company in 1991
omitted and has not reinstated its dividend on its Class A Stock; however,
should it be reinstated, dividends would be paid on the restricted stock
reported. At December 29, 1995 the closing market price of the Company's
shares of Class A Stock was $10.25 per share.
/(8)/ Includes amounts of $25,502, $24,996, $28,183, $30,610, and $16,212 for
Messrs. Curtin, Junkunc, Paolino, Aparicio, and Cooke representing amounts
credited to a long-term deferred cash incentive plan account established
for the executive as of the end of the 1995 fiscal year. On February 23,
1996 the Board of Directors approved, on recommendation of the Salary
Committee, the Brown & Sharpe Key Employees' Long-Term Deferred Cash
Incentive Plan ("LTDCIP") with effect from January 1, 1995 (see discussion
in Compensation Committee Report). Under the LTDCIP award credits are to
be made annually beginning with the 1995 year for LTDCIP participants
based on one year's financial performance out of an award pool of 6% of
pre-tax adjusted earnings with participants becoming vested in each
accrued annual award after three years subject to accelerated vesting upon
a change of control (as defined) and with payout of the credited vested
amounts plus interest accrued at a market rate deferred until retirement
at age 65, death or disability, or earlier upon termination of employment
for reasons other than cause.
-12-
<PAGE>
STOCK OPTION/SAR GRANTS
Under the provisions of the Company's 1989 Equity Incentive Plan
("EIP"), a variety of stock and stock-based awards, performance cash awards and
related benefits, including stock options and stock appreciation rights
("SARs"), may be awarded to Executive Officers and other key employees of the
Company and its subsidiaries. The stockholders approved an amendment to the EIP
at the 1995 Annual Meeting increasing by 500,000 shares the aggregate number of
shares of Class A stock to 875,000 shares which may be issued and delivered upon
options, restricted stock awards or other stock-based awards granted to
employees under such plan and to limit to 300,000 shares the number of shares
that any recipient can thereafter be awarded in any calendar year pursuant to
options granted under the EIP. Any options previously awarded and remaining
outstanding under the Company's Amended 1973 Stock Option Plan (the "'73 Plan"),
which plan terminated on April 26, 1989, are subject to being exercised by
recipients and are included, if applicable, in the amounts set forth in the
table on Page 14. The following table sets forth stock options granted to
Executive Officers under the EIP in 1995.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable Value
at Assumed Annual Rates of
Stock Price Appreciation for
Individual Grants Option Term/(2)/
- ----------------------------------------------------------------------------------- ----------------------------
(a) (b) (c) (d) (e) (f) (g)
# of Securities % of Total
Underlying Options/SARs Exercise
Options/ SARs Granted to or Base Expira-
Granted/(1)/ Employees in Price tion
Name (#) Fiscal Year ($/Sh) Date 5% ($) 10%($)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
F. Curtin 200,000 37.8 6.75 5-03-05 849,000 2,151,540
C. Junkunc 40,000 7.5 7.00 7-27-05 176,092 446,248
R. Paolino 30,000 5.7 7.00 7-27-05 132,069 334,686
A. Aparicio 33,000 6.2 7.00 7-27-05 145,275 368,154
C. J. Cooke 15,000 2.8 7.00 7-27-05 66,034 167,343
</TABLE>
____________________________
/(1)/ There were no SARs granted to any of the Executive Officers named in the
table in 1995.
/(2)/ The potential realizable values represent future opportunity and have not
been reduced to present value in 1995 dollars. The dollar amounts included
in these columns are the result of calculations at assumed rates set by
the SEC for illustration purposes, and these rates are not intended to be
a forecast of the common stock price and are not necessarily indicative of
the values that may be realized by the named Executive Officer. The
potential realizable values are based on arbitrarily assumed annualized
rates of stock price appreciation of five and ten percent over the full
ten-year-term of the options. For example, in order for the persons named
in the table who received options with an exercise price of $7.00 per
share to realize the potential values set forth in the five and ten
percent columns, the price per share of the Company's Class A Stock would
have to be approximately $11.40 and $18.15, respectively.
-13-
<PAGE>
AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table summarizes options and SARs exercised during 1995
and presents the value of unexercised options and SARs held by the named
Executive Officers at fiscal year-end:
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options/SARs at Options/SARs at
Fiscal Year-End (#) Fiscal Year-End ($)
Shares
Acquired on Value Exercisable (E)/ Exercisable (E)/
Name Exercise (#) Realized ($) Unexercisable (U) Unexercisable (U)
- ---------------------------------------------------------------------------------------------------------
(E) (U) (E) (U)
--- --- --- ---
<S> <C> <C> <C> <C> <C> <C>
Frank T. Curtin None -- - 200,000 $ -- $700,000
Charles A. Junkunc None -- 25,000 40,000 $93,750 $130,000
Richard F. Paolino None -- 49,332 30,000 $93,750 $ 97,500
Antonio Aparicio None -- 25,000 33,000 $93,750 $107,250
C. John Cooke None -- 15,000 15,000 $56,250 $ 48,750
</TABLE>
FOREIGN RETIREMENT PLANS
Tesa-Brown & Sharpe SA ("Tesa"), one of the Company's principal
foreign subsidiaries, maintains a defined contribution retirement plan required
by Swiss law, pursuant to which benefits accrue on behalf of Mr. Aparicio
annually in an amount equal to a percentage (based on the executive's age and on
his salary) of annual compensation and under which interest accrues on accrued
benefit amounts at a compound annual rate of 4%. Upon retirement, the executive
is entitled to receive an annual pension in an amount equal to 7.2% of the
executive's total accrued benefits, and the estimated annual pension payable
upon retirement at normal retirement age under such plan is an amount equivalent
to $99,416 for Mr. Aparicio. In addition, Tesa sponsors a separate defined
contribution plan pursuant to which Mr. Aparicio is eligible to receive a lump-
sum payment upon retirement. The estimated lump sums payable upon retirement
under this sponsored plan at normal retirement age is an amount equivalent to
$335,691 for Mr. Aparicio; and Mr. Stuber, formerly Managing Director of Tesa
and who resigned from the Company May 31, 1995, was entitled to an accrued
vested amount equivalent to $258,940 under such plan, which amount was
transferred by Tesa to Mr. Stuber's retirement account with his new employer.
(Amounts converted at the rate of $.7332 per Swiss Franc.)
Dr. C. John Cooke, Vice President-Custom Metrology Division, one of
the named Executive Officers in the Summary Compensation Table, is a participant
in the Brown & Sharpe Group Pension Plan covering the Company's U.K. employees,
pursuant to which employees contribute 4.5% of their salary. Dr. Cooke, who is
designated a "Special Member" of the Plan which entitles him to the highest
retirement benefit under such Plan, is eligible to retire and receive pension
benefits under the plan at age 60 on January 19, 1997 at the rate of 1/40 of
pensionable salary for each year of service. Based on an estimated total final
average salary of (Pounds)90,000, length of service and 14 3/4 years'
participation in the Plan, he would be eligible to receive an estimated final
annual pension benefit net of any statutory governmental social benefit of
(Pounds)33,188 equivalent to approximately $52,433 at the average exchange rate
of $1.5799 per British Pound.
-14-
<PAGE>
EMPLOYMENT, SEVERANCE AND OTHER AGREEMENTS
Mr. Frank T. Curtin has an Employment Agreement with the Company for a
three-year term of employment commencing on May 2, 1995 in the capacity of
President and Chief Executive Officer. The Agreement provides for (i) an annual
base salary of $300,000 subject to increases at the discretion of the Board of
Directors (which base salary was increased by the Board to $315,000), (ii) a
guaranteed cash incentive bonus for 1995 performance of $75,000, (iii) future
cash incentive bonuses for subsequent fiscal years in an amount not to exceed
the maximum amount permitted under the PIP with all or a portion thereof to be
"earned out" and subject to achievement of objectives determined by the
Compensation Committee of the Board (See Compensation Committee Report) and (iv)
participation in other executive employee benefits. Pursuant to the Agreement,
Mr. Curtin also received an award of incentive stock options disclosed in the
Table on Page 13, and the Company agreed to annually contribute an amount of 10%
of his base salary to a Supplemental Executive Retirement Plan account for his
benefit. The Agreement provides that the Company may terminate his employment
for a reason other than death, disability, or for cause (as defined in the
Agreement) subject, however, to continuation of his base salary and benefits for
the unexpired term remaining under the Agreement, but in any event not less than
twelve months. In addition Mr. Curtin has the right under the Agreement to
terminate his employment following a Change of Control of the Company (as
defined in the Agreement) in the event his position or job responsibilities
change or the compensation and benefits reserved to him in the Agreement are not
provided. In such event the Company would be required to continue to pay him
the base salary and benefits in effect at the time of such termination for the
unexpired term of the Employment Agreement. No salary or benefits are continued
if the employment is terminated for cause or upon death or disability.
The Company has an Employment/Severance Agreement dated March 14, 1988
with Richard F. Paolino, Vice President-Commercial Operations, which provides
for a two-year term of employment, commencing upon the date of a Change of
Control (as defined for the purposes in the Agreement) of the Company. The two-
year term of employment commenced on the occurrence of the acquisition by
Finmeccanica S.p.A. of shares of Class A Stock in connection with the
acquisition on September 28, 1994 by the Company of DEA S.p.A. In general, the
agreement provides for salary, bonus, participation in employee benefit plans
and other fringe benefits at rates at least equal to those in effect immediately
prior to the Change of Control. In the event his employment is terminated by the
Company before the term expires (except for cause, as defined), Mr. Paolino is
entitled to (i) the same rates of salary, bonus, benefits and fringes for the
lesser of 12 months or the number of months remaining in the two-year term of
employment, which payments are subject to mitigation, and (ii) a lump sum equal
to the sum of his highest annual base salary during the three-year period
immediately preceding termination, the value of annual fringe benefits, and the
highest cash bonus received during the prior three-year period. Upon such
termination, Mr. Paolino is also entitled to limited continuation of certain
employee welfare plans and accelerated vesting of any stock options or
restricted stock. For purposes of this agreement, Mr. Paolino's severance rights
would also be triggered by a deemed termination following the change of control,
which would include a reduction of employment compensation, benefits, position
or responsibilities or relocation of the Company's principal executive offices.
The payment and benefits will be reduced to the extent necessary to preserve
their deductibility to the Company for Federal income tax purposes and to avoid
imposition of any "excess parachute payments" taxes under the Internal Revenue
Code. The agreement was amended on July 28, 1995 to provide that certain
provisions of the agreement, including those pertaining to acceleration and
exercisability dates, would be inapplicable to the incentive stock options for
30,000 shares of Class A stock awarded to Mr. Paolino on July 28, 1995. Mr.
Paolino is subject to a covenant not to compete with the Company (as specified)
during the two-year term of such employment and for the lesser of one-year or
the balance of the term of employment following any such termination. The
agreement also obligates the Company to pay for any legal fees incurred by Mr.
Paolino to enforce his rights under the agreement and provides for letter of
credit mechanics to carry this out.
-15-
<PAGE>
The Company also has an agreement with Charles A. Junkunc, Vice
President and Chief Financial Officer, who joined the Company on May 4, 1992, to
pay a severance amount to him equal to his annual salary in effect at the time
of termination and to continue his basic employee benefits for a one-year period
in the event his employment with the Company is terminated for any reason. Under
the agreement the Company will pay a bonus equal to the average of the bonus
payments received by him during the three years (or such lesser period) prior to
termination, pro rated according to the number of months of service during the
year in which any termination occurs. In addition, a minimum bonus of $34,000
for 1993 was guaranteed pursuant to the agreement. Upon any termination Mr.
Junkunc, if requested by the Company, is to provide consulting services to the
Company for one year, with offsets against the payments to be made by the
Company for any income received from other sources.
Fred M. Stuber, who was a Director and President and Chief Executive
Officer of the Company since January 1, 1991 resigned from such offices on May
2, 1995 and terminated his employment with the Company effective May 31, 1995.
The Company entered into a Severance Agreement with Mr. Stuber on the date of
his termination, which provided for a severance payment to him of 681,211 Swiss
Francs equivalent to $576,372 at an average annual exchange rate of $.8461 per
Swiss Franc. One half of the severance amount was paid to Mr. Stuber in a lump-
sum in cash on termination, and the balance paid in seven equal monthly
installments with the final payment being made on December 1, 1995. The
Agreement also provided for the forfeiture of 16,100 shares of unvested
restricted Class A stock previously awarded to Mr. Stuber, that he would retain
his rights to his accrued retirement benefits in the Tesa S.A. retirement plans,
and a covenant by Mr. Stuber that he would not directly or indirectly compete
with the business of the Company for a period of two years following his
resignation.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Change of Ownership
A substantial change in ownership of the common stock of the Company
occurred in connection with the acquisition by the Company and its wholly owned
subsidiary Brown & Sharpe International Capital Corporation on September 28,
1994 of all of the stock of DEA S.p.A., an Italian corporation, and its related
metrology business from Finmeccanica S.p.A., an Italian corporation
("Finmeccanica"). The Company believes, however, that no change in control of
the Company has occurred as a result of that transaction. The business of DEA
S.p.A. and its subsidiaries ("DEA") is headquartered in Turin, Italy. The
purchase of DEA S.p.A. was pursuant to the provisions of the Acquisition
Agreement dated as of June 10, 1994 between the Company and Finmeccanica, as
amended (the "DEA Acquisition Agreement"); and the purchase price paid for DEA
was delivery by the Company to Finmeccanica at the closing of 3,450,000 newly
issued shares of Class A Stock of the Company.
Share Voting Agreements
Under the terms of a Shareholders Agreement dated as of September 28,
1994 between Finmeccanica and the Company (the "Shareholders Agreement") entered
into in connection with the acquisition of DEA, Finmeccanica was granted the
right to nominate and have elected to the Board following the acquisition of DEA
three out of ten members of the Company's Board of Directors each for respective
terms expiring at the 1995, 1996 and 1997 annual meetings of the Company's
stockholders and to have one of such directors on the Executive Committee of the
Company's Board of Directors. This right was exercised by notice given to the
Company on the date of closing the DEA acquisition, and Finmeccanica's three
nominees for election to the Company's Board of Directors, Messrs. Albareto, de
Benedictis and Cannatelli, were duly elected to office by the Board at a regular
meeting of the Company's Board of Directors held on October 28, 1994. Pursuant
to the Shareholders Agreement, when Henry D. Sharpe, Jr. ceases to be a Director
of the Company, Finmeccanica will thereafter be entitled to have only two
nominees on the Company's Board of Directors, and a third nominee, who may not
be an employee of Finmeccanica
-16-
<PAGE>
but shall be an experienced executive or advisor to industrial businesses, shall
be selected by Finmeccanica but subject to approval (not to be unreasonably
unheld) by the Company's Board of Directors. In any event, Finmeccanica is
entitled to two nominees on the Company's Board of Directors so long as it owns
at least 1,250,000 shares of Class A Stock and one nominee on the Company's
Board of Directors so long as it owns at least 375,000 shares of Class A Stock.
Under the terms of a letter agreement dated as of September 28, 1994
between Henry D. Sharpe, Jr., Chairman of the Board, and Finmeccanica, Mr.
Sharpe has agreed to vote all shares of Company common stock as to which he has
sole voting power in favor of the Finmeccanica nominees standing for election to
the Board of Directors. The Shareholders Agreement provides that Finmeccanica
will vote its shares of Class A Stock in favor of the election as directors of
all of the nominees selected by the Board of Directors of the Company.
The Shareholders Agreement also provides Finmeccanica with certain
rights and obligations with respect to its ownership of shares of Class A Stock
in the Company. Finmeccanica is prohibited from acquiring any shares of the
Company's stock if such acquisition would increase Finmeccanica's ownership
above approximately 40% on a fully diluted basis (as defined in the Shareholders
Agreement) until December 31, 1998, or earlier upon the occurrence of certain
specified events. The Agreement also provides preemptive rights to Finmeccanica
so long as it owns at least 862,500 shares of the Company's Class A Stock, such
that the Company may not issue any shares of Class A Stock to any third party,
other than certain specified exclusions, without first offering to Finmeccanica
the right to purchase that percentage of the Company's equity securities such
that Finmeccanica's percentage ownership of the Company's common stock on a
fully diluted basis (as defined in the Shareholders Agreement) remains constant.
In addition, Finmeccanica is prohibited from selling any of the Company's equity
securities to any third party until the expiration of two years after the
closing of the DEA acquisition and upon the expiration of such two-year period
may sell securities to a third party only after offering the Company the
opportunity to purchase such shares (other than sales pursuant to a registered
public offering pursuant to Finmeccanica's registration rights and sales
pursuant to Rule 144 under the Securities Act of 1933).
Prior to completion of the DEA acquisition and entering into the
Shareholders Agreement, the Company amended the Rights Agreement between it and
the First National Bank of Boston dated March 9, 1988 pursuant to authority
reserved in such agreement to exclude Finmeccanica from the definition of an
"Acquiring Person" under the Rights Agreement so long as it does not own shares
of Class A Stock other than those acquired in connection with the DEA
acquisition and as provided in the Shareholders Agreement. As a result of the
amendment the exercisability of the preferred stock purchase rights of the
holders of Class A Stock and Class B Stock created under the Rights Agreement
was not triggered.
Related Party Transactions and Agreements
On September 28, 1994, in connection with the acquisition of DEA, the
Company entered into a Credit Support Agreement with the Finmeccanica (the
"Credit Support Agreement"). Pursuant to the Credit Support Agreement,
Finmeccanica issued unconditional payment guarantees on September 28, 1994 to
Banca Commerciale Italiana, New York Branch, and Istituto Bancario San Paolo di
Torino, New York Branch, with respect to their extension of two three-year term
loans to the Company in the aggregate amount of $25 million bearing interest at
a floating rate of LIBOR plus 0.60% with interest payable quarterly and the
entire principal amount of such loans due on September 28, 1997. The Company
paid Finmeccanica a one-time fee of $800,000 upon entering into the Credit
Support Agreement with Finmeccanica. In the event Finmeccanica is required to
pay such banks any amounts under its guarantees, subject to the prior repayment
by the Company of any amounts due in respect of certain senior indebtedness (as
defined in the Credit Support Agreement), Finmeccanica will be entitled to
reimbursement from the Company of any such amounts paid by Finmeccanica under
its guarantees. The Agreement provides that as long as the Finmeccanica
guarantees remain outstanding, the Company will not, with certain exceptions,
create any liens on
-17-
<PAGE>
the accounts receivable or inventory of DEA S.p.A. or its subsidiaries or permit
DEA S.p.A. and its subsidiaries to have any debt to any other financial
institutions other than certain permitted indebtedness. In connection with
entering into the Credit Support Agreement, DEA S.p.A. also furnished a payment
guarantee to Finmeccanica, subordinated to the interest of Foothill Capital
Corporation, a principal term lender to the Company under a $25 million
revolving line of credit agreement with the Company.
Following its acquisition by the Company, DEA continued to be a
lessee under a lease agreement with the Elsag Bailey Division of Finmeccanica
with respect to DEA's principal headquarters facility located in Moncalieri,
Italy and the DEA sales and support facility in Madrid, Spain. The lease of the
Italian property expires on December 31, 1997, and the minimum annual rent under
such lease is approximately Lit. 1,400 million or approximately $840,000,
subject to adjustment as provided in the lease. The lease of the Spanish
property expires on January 4, 1998 at an annual rent of Pesetas 30,600 million
or approximately $200,000. The Company believes that the terms of such leases
have been and will be comparable to those which could be obtained from third
parties.
The DEA Acquisition Agreement provides that for a period of five years
after the closing date of the DEA acquisition, neither Finmeccanica nor any of
its affiliates will directly or indirectly acquire more than a 20% ownership
interest in any business, venture or activity which competes with the metrology
business relating to coordinate measuring machines (including parts and
accessories) being conducted or proposed to be conducted by DEA at the closing
date of the DEA acquisition or relating to metrology products performing
functions similar to those of the products manufactured and sold by DEA. These
non-competition provisions will terminate if Brown & Sharpe no longer owns a
greater than 50% ownership interest in DEA. Finmeccanica will not be in breach
of the non-competition provision of the DEA Acquisition Agreement if it or any
of its affiliates acquires or invests in any company which includes among its
business operations the manufacture and sale of metrology products performing
functions similar to those of the products manufactured and sold by DEA to the
extent that sales of such products constitute only an immaterial portion of the
total revenues of the acquired business. In the DEA Acquisition Agreement,
Finmeccanica has represented to Brown & Sharpe that it has no present intention
of acquiring any such company.
The DEA Acquisition Agreement provides that Brown & Sharpe and
Finmeccanica will, for the periods specified in the DEA Acquisition Agreement,
none of which are shorter than 21 months after the closing of the DEA
acquisition, indemnify each other against up to $10.0 million (less the first
$500,000) resulting from the inaccuracy of representations and warranties
covering matters relating to the respective business, financial statements,
material contracts, compliance with law and other items customary in
transactions of this type), breach of non-fulfillment of any agreement of
covenant contained in or required to be entered into in connection with the DEA
Acquisition Agreement and certain environmental and tax claims, if any.
Finmeccanica will also indemnify Brown & Sharpe for the amount by which certain
of the liabilities of DEA exceeds limits provided for in the purchase price
provisions of the DEA Acquisition Agreement.
In addition, the DEA Acquisition Agreement provides for a post-closing
purchase price adjustment pursuant to which additional shares of Class A Stock
may, under the specified circumstances, be required to be delivered to
Finmeccanica S.p.A. If the post-closing adjustment indicates an increase or a
decrease in the purchase price, then either the Company will issue to
Finmeccanica an additional number of shares of Class A Stock with a value equal
to such positive difference or Finmeccanica will make a cash payment to the
Company equal to such negative difference. However, if such positive or negative
difference is less than $500,000, no adjustment will be made. The amount of any
purchase price adjustment will be conclusively determined, subsequent to the
closing date of the DEA acquisition, based upon the specified calculations and
the audited combined balance sheet as of the Pricing Date of DEA and its
subsidiaries as determined under the procedures set forth in the DEA Acquisition
Agreement. The DEA Acquisition Agreement also provided that prior to the closing
Finmeccanica was required to assume or discharge all indebtedness for borrowed
money of DEA other than an amount of indebtedness net of cash in excess of Lit.
0.8
-18-
<PAGE>
billion, to remain outstanding on the closing, which amount is determined as of
July 31, 1994 (the "Pricing Date") pursuant to a formula in the DEA Acquisition
Agreement.
The Company entered into an agreement with Finmeccanica on December
18, 1995 amending the Acquisition Agreement to eliminate the post-closing
Purchase Price Adjustment provision referred to above and substituting an
agreement of the parties that a Purchase Price Adjustment shall be payable to
the Company by Finmeccanica in the amount of Lire 2,100 million without interest
(approximately $1.38 million). The agreed amount is to be paid by Finmeccanica
in the form of a waiver of rent due Finmeccanica on the DEA Moncalieri, Italy
facility referenced above through December 31, 1997, the date of expiration of
the lease, and is subject to reduction if the premises is vacated after June 30,
1996 by an amount equal to the per diem amount of rent due from July 1, 1996 to
the date the premises are vacated by DEA.
Except for their relationship to Finmeccanica by virtue of their
executive positions with such company or its affiliates, neither of Mr.
Cannatelli, who is a nominee for election to office, or Messrs. Albareto or de
Benedictis, who are continuing directors, have any direct or indirect interest
in any of the foregoing transactions.
STOCK PERFORMANCE GRAPH
The following graph sets forth information comparing the cumulative
total return to holders of the Company's Class A Stock over the Company's last
five fiscal years beginning at the market close on the last trading day before
the beginning of the Company's fifth preceding fiscal year (the "Measuring
Period") with (1) the cumulative total return of the Standard & Poor's 500 Stock
Index, and (2) the cumulative total return of the Standard & Poor's Machinery
(Diversified) Index. The yearly change in cumulative total return is measured by
dividing (i) the sum of (a) the cumulative amount of dividends for each fiscal
year, assuming dividend reinvestment, and (b) the change in share price between
the beginning and end of the Measuring Period, by (ii) the share price at the
beginning of the Measuring Period.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
ACTUAL NUMBERS INDICES
=============================================== ===============================
DATES BNS SP50 SPDS COMPOSITE BNS SP50 SPDS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/90 10.000 330.220 226.681 51.766 12/31/90 100 100 100
12/31/91 9.125 417.090 262.928 65.341 12/31/91 91.25 126.3067 115.9902
12/31/92 6.750 435.710 262.059 68.235 12/31/92 67.5 131.9454 115.6066
12/31/93 7.625 466.450 380.788 73.228 12/31/93 76.25 141.2543 167.9837
12/30/94 6.625 459.270 363.877 72.081 12/30/94 66.25 139.08 160.5234
12/29/95 10.250 615.930 439.338 96.582 12/29/95 102.5 186.5211 193.8128
- ------------------------------------------------------------------------------------------------------
</TABLE>
-19-
<PAGE>
ITEM 2
RATIFICATION OF APPOINTMENT
OF
INDEPENDENT ACCOUNTANTS
The Board of Directors has appointed Ernst & Young L.L.P. as the
Company's independent accountants for fiscal year 1996, subject to approval by
the stockholders. In the event the stockholders do not ratify the selection of
Ernst & Young L.L.P., the Board of Directors will consider the selection of
another accounting firm to serve as the Company's independent accountants.
Neither Ernst & Young nor any of its partners has any direct or indirect
financial interest in or any connection (other than as independent auditor) with
the Company or any subsidiary. Representatives of Ernst & Young L.L.P. are
expected to be present at the Annual Meeting with the opportunity to make a
statement if they desire to do so and to respond to appropriate questions. THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE PROPOSAL TO APPOINT
ERNST & YOUNG L.L.P. AS THE COMPANY'S INDEPENDENT ACCOUNTANTS FOR THE 1996
FISCAL YEAR.
GENERAL INFORMATION
VOTING OF PROXIES
Each valid proxy in the enclosed form received by the Company will be
voted by the persons named therein. All shares represented by the proxy will be
voted FOR the election of the Board's nominees named herein as Directors unless
the stockholder specifies otherwise or authority to vote for the proposed slate
of Directors or any individual Director has been withheld. If for any reason any
of such nominees should not be available as a candidate for Director, the
proxies will be voted for such other candidate or candidates as may be nominated
by the Board of Directors. With respect to the proposal to ratify the
appointment of Ernst & Young L.L.P. as the Company's independent accountants,
all such shares will be voted FOR such proposal, unless the proxy specifies that
it should be voted against a proposal or not voted at all. If any other matter
should come before the meeting, then the persons named in the enclosed form of
proxy will have discretionary authority to vote all proxies with respect thereto
in accordance with their judgment.
Consistent with Delaware law and under the Company's by-laws, the
holders of a majority of the shares entitled to cast a majority of the votes
entitled to be cast onvote on a particular matter, present in person or
represented by proxy, constitutes a quorum as to such matter. Votes cast by
proxy or in person at the Annual Meeting will be counted by persons appointed by
the Board of Directors to act as Judges of Election for the meeting.
The three nominees for election as Directors at the Annual Meeting who
receive the greatest number of votes properly cast for the election of Directors
shall be elected Directors. A majority of the votes properly cast on the matter
is necessary to approve the actions proposed in Item 2, as well as any other
matter which comes before the Annual Meeting, except where applicable law or the
Company's certificate of incorporation or by-laws require otherwise.
The Judges of Election will count the total number of votes cast "FOR"
approval of proposals, other than the election of Directors, for purposes of
determining whether sufficient affirmative votes have been cast. The Judges of
Election will count shares represented by proxies that withhold authority to
vote for a nominee for election as a
-20-
<PAGE>
Director or that reflect abstentions and "broker non-votes" (i.e., shares
represented at the Annual Meeting held by brokers or nominees as to which (i)
instructions have not been received from the beneficial owners or persons
entitled to vote and (ii) the broker or nominee does not have the discretionary
voting power on a particular matter) only as shares that are present and
entitled to vote on the matter for purposes of determining the presence of a
quorum, but neither abstentions nor broker non-votes will have any effect on the
outcome of voting on the matter.
SOLICITATION OF PROXIES
The entire expense of solicitation of proxies will be borne by the
Company. In addition to the solicitation of proxies by mail, Directors,
officers, and employees of the Company may solicit in person, by telephone,
facsimile, telegram or by telex. The Company will reimburse persons holding
stock for others in their names or in nominee names for their reasonable
expenses in sending soliciting material to the beneficial owners of common
stock.
STOCKHOLDER PROPOSALS FOR THE 1997 ANNUAL MEETING
All stockholder proposals intended to be submitted at the Company's
1997 Annual Meeting must be received by the Secretary of the Company on or
before November 28, 1996 in order to be considered for inclusion in the
Company's 1997 proxy materials.
IMPORTANT NOTICE
No matter how small your holdings, if you do not plan to attend the
meeting in person, you are respectfully requested to complete, sign, date and
return the accompanying Proxy in the enclosed, post-paid envelope at your
earliest convenience.
By Order of the Board of Directors,
/s/James W. Hayes, III
James W. Hayes, III
Secretary
North Kingstown, Rhode Island 02852
March 30, 1996
-21-
<PAGE>
BROWN & SHARPE MANUFACTURING COMPANY
PROXY FOR CLASS A COMMON STOCK AND CLASS B COMMON STOCK
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
MAY 2, 1996
The undersigned appoints each of Frank T. Curtin, Howard K. Fuguet and Paul
R. Tregurtha proxies with power of substitution to vote for the undersigned at
the Annual Meeting of Stockholders called for Thursday, May 2, 1996, at 10:00
A.M., at Precision Park, 200 Frenchtown Road, North Kingstown, Rhode Island, and
at any adjournments, all shares of stock which the undersigned would be entitled
to vote if present in accordance with their judgment upon any matters that may
properly come before said meeting and to vote as specified on the reverse.
A majority of the proxies present and acting at the meeting in person or by
substitute (or if only one shall be so present, then that one) shall have and
may exercise all of the power and authority of said proxies hereunder. The
undersigned hereby revokes any proxy previously given and acknowledges receipt
of the Notice of Annual Meeting and Proxy Statement pertaining to the aforesaid
meeting and a copy of the Company's Annual Report for the year ended December
31, 1995.
YOUR SHARES OF CLASS A STOCK AND CLASS B STOCK, INCLUDING THOSE IF A
PARTICIPANT IN THE SARP AND ESOP, ON THE REVERSE SIDE ARE DESIGNATED "CLA",
"CLB", "SPA", "SPB" AND "ESA", "ESB" RESPECTIVELY.
TO APPROVE THE BOARD OF DIRECTORS' RECOMMENDATIONS, SIMPLY SIGN AND DATE
THE BACK. YOU NEED NOT MARK ANY BOXES.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
<PAGE>
Please mark
[X] votes as in
this example.
1. Election of Directors: To fix the number of Directors at ten and to elect
three Directors as set forth in the Proxy Statement, Class A Stock may be voted
for Messrs. Cannatelli, Nelson and Boss and Class B Stock may be voted only for
Messrs. Nelson and Boss as indicated below. Holders of Class A Stock and Class
B Stock who wish to provide instructions should vote such class of stock in the
space indicated below.
<TABLE>
<CAPTION>
CLASS A STOCK: CLASS B STOCK:
Cannatelli, Nelson and Boss Nelson and Boss FOR AGAINST ABSTAIN
<S> <C> <C> <C>
WITHHELD 2. To ratify the appoint-
FOR WITHHELD FOR FROM ment of Ernst & Young
ALL [ __ ] FROM ALL [ __ ] BOTH [ __ ] BOTH [ __ ] LLP as the Company's [ __ ] [ __ ] [ __ ]
NOMINEES NOMINEES NOMINEES NOMINEES independent accountants
For, except vote withheld from For, except vote withheld from for the fisical year
the below named nominee(s) the below named nominee: ending December 31, 1996
[ __ ]______________________________ [ __ ]__________________________
MARK HERE
FOR ADDRESS
CHANGE AND [ __ ]
NOTE AT LEFT
</TABLE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR THE ELECTION OF THE NOMINEES INDICATED AND FOR PROPOSAL 2.
Note: When signing as Executor, Administrator, Trustee, Guardian,
etc., and full title. (Sign exactly as name appears on this card.)
