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<PAGE>
Commission File Number 1-5881
-----------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT TO APPLICATION OR REPORT
Filed Pursuant to Section 12, 13 or 15(d) of
THE SECURITIES EXCHANGE ACT OF 1934
BROWN & SHARPE MANUFACTURING COMPANY
------------------------------------
(Exact name of registrant as specified in charter)
AMENDMENT NO. 1
The undersigned registrant hereby amends the following items, financial
statement, exhibits or other portions of its Annual Report for the year ended
December 31, 1996, on Form 10-K as set forth in the pages attached hereto:
The Exhibit Index and Exhibits are amended to reflect the addition of the
following:
"Exhibit 28.1 - Annual Report on Form 11-K for The Brown & Sharpe Savings
and Retirement Plan for Management Employees for the year ended December 31,
1996."
"Exhibit 28.2 - Annual Report on Form 11-K for The Brown & Sharpe Savings
and Retirement Plan for the year ended December 31, 1996."
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
Brown & Sharpe Manufacturing Company
By: /s/ Alfred J. Corso
------------------------------------
Alfred J. Corso
Controller
(Principal Accounting Officer)
<PAGE>
Exhibit 28.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 11-K
Annual Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
For the Fiscal Year Ended December 31, 1996
-----------------
Commission File Number 1-5881
------
THE BROWN & SHARPE SAVINGS AND RETIREMENT PLAN FOR MANAGEMENT EMPLOYEES
-----------------------------------------------------------------------
(Full Title of the Plan)
BROWN & SHARPE MANUFACTURING COMPANY
200 Frenchtown Road
North Kingstown, Rhode Island 02852-1700
(401) 886-2000
(Name of Issuer and Address of its Principal Executive Office)
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Plan has duly caused this Annual Report to be signed on its behalf by the
undersigned, thereunto duly authorized, in North Kingstown, Rhode Island, on the
23rd day of June, 1997.
- ---- ----------
BROWN & SHARPE SAVINGS & RETIREMENT
PLAN FOR MANAGEMENT EMPLOYEES
By: /s/ Alfred J. Corso
-----------------------------------
Alfred J. Corso
Controller
(Principal Accounting Officer)
2
<PAGE>
BROWN & SHARPE SAVINGS AND RETIREMENT PLAN FOR MANAGEMENT EMPLOYEES
Table of Contents
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Ernst & Young LLP, Independent Auditors 4
Financial Statements:
Statements of Net Assets Available for Plan Benefits
at December 31, 1996 and 1995 5
Statements of Changes in Net Assets Available for Plan
Benefits for the Years Ended December 31, 1996 and 1995 5
Notes to Financial Statements 6-15
Supplemental Schedules:
Schedule of Reportable Transactions 16-19
Schedule of Assets Held for Investment Purposes at December 31, 1996 20
Consent of Independent Auditors 21
</TABLE>
3
<PAGE>
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
-------------------------------------------------
Brown & Sharpe Savings and Retirement Plan
for Management Employees Committee
Brown & Sharpe Manufacturing Company
We have audited the accompanying statements of net assets available for
plan benefits of the Brown & Sharpe Savings and Retirement Plan for Management
Employees (the "Plan") as of December 31, 1996 and 1995, and the related
statements of changes in net assets available for plan benefits for the years
then ended. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for benefits of the
Plan at December 31, 1996 and 1995, and the changes in its net assets available
for benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audit was made for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying supplemental schedules
of assets held for investment purposes as of December 31, 1996, and reportable
transactions for the year then ended, are presented for purposes of complying
with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974, and are
not a required part of the financial statements. The supplemental schedules have
been subjected to the auditing procedures applied in our audits of the financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the financial statements taken as a whole.
ERNST & YOUNG LLP
June 23, 1997
4
<PAGE>
THE BROWN & SHARPE SAVINGS & RETIREMENT PLAN FOR MANAGEMENT EMPLOYEES
---------------------------------------------------------------------
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
----------------------------------------------------
<TABLE>
<CAPTION>
As of December 31,
------------------
1996 1995
---- ----
<S> <C> <C>
Assets:
Investments (Notes 2 and 5) $26,786,938 $21,861,765
Dividends and interest receivable - 86,842
Employer contribution receivable 843,175 759,023
Plan loans receivable 487,606 260,451
----------- -----------
Net Assets Available for Plan Benefits $28,117,719 $22,968,081
=========== ===========
</TABLE>
STATEMENTS OF INCOME AND CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
--------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the years ended December 31,
--------------------------------
1996 1995
---- ----
<S> <C> <C>
Additions
- ---------
Contributions
Employer $ 1,040,395 $ 788,389
Employee 1,391,573 1,195,789
----------- -----------
2,431,968 1,984,178
Investment income
Interest 1,630,252 744,736
Dividends - 36,276
----------- -----------
1,630,252 781,012
Net appreciation
in fair value of investments 1,729,650 2,815,217
----------- -----------
Total additions 5,791,870 5,580,407
Deductions
Payments to participants (3,077,134) (1,720,895)
Loan defaults (59,473) -
Fees (421) (12,402)
----------- -----------
Total deductions (3,137,028) (1,733,297)
Transfers
From Brown & Sharpe Employee Stock Owner-
ship & Profit Participation Plan (ESOP) 16,264 11,383
From Brown & Sharpe Savings
& Retirement Plan (SARP) 150,131 46,263
Transfers from DEA (Note 1) 2,328,401 -
----------- -----------
Net transfers 2,494,796 57,646
----------- -----------
Net increase in assets 5,149,638 3,904,756
Net assets, beginning of year 22,968,081 19,063,325
----------- -----------
Net assets, end of year $28,117,719 $22,968,081
=========== ===========
</TABLE>
See notes to the financial statements.
5
<PAGE>
THE BROWN & SHARPE SAVINGS & RETIREMENT PLAN FOR MANAGEMENT EMPLOYEES
Notes To Financial Statements
-----------------------------
1. Plan Description
----------------
The following description of The Brown & Sharpe Savings and Retirement Plan
for Management Employees (the "Plan") provides only general information.
Participants should refer to the Summary Plan Description for more complete
details.
General
-------
The Plan is a defined contribution plan covering all eligible full-
time salaried employees of Brown & Sharpe Manufacturing Company (the
"Company") and its affiliated companies who participate in the Plan.
Such employees are immediately eligible to make deferred salary
contributions to the Plan. One year of service is required to become
a participant receiving Company contributions. The Plan is subject to
the provisions of the Employee Retirement Income Security Act of 1974
(ERISA), as amended.
As a result of the Company's acquisition of DEA S.p.A. on September
28, 1994, participants of the Digital Electronic Automation, Inc.
Tax-Deferred Savings Plan (the "DEA Plan") became eligible to
participate in the Plan on April 1, 1995. Pursuant to the terms of
the DEA Plan, former DEA employees may select an annuity as a
distribution option under the Plan. In May 1996, approximately
$2,328,401 of net assets were transferred from the DEA Plan to the
Plan.
On May 6, 1996, the assets of the Plan were transferred from Fleet
National Bank to Putnam Fiduciary Trust Company which was appointed
new Trustee and Recordkeeper.
Contributions
-------------
The Plan permits a participant to make deferred salary contributions
to the Plan up to 16% of compensation up to a maximum of $9,500 in
1996 and $9,240 in 1995, (indexed in future years) which is not
subject to federal income tax until distributed. Contributions are
invested at the direction of the employee in one or more investment
alternatives, or "Funds," as described below.
The Company may, at the discretion of the Board of Directors, make a
supplemental contribution of 4% of annual compensation plus 4% of the
amount over the Social Security wage base to the account of each
participant to be invested as instructed by the participant. The
Company's supplemental contributions for 1996 and 1995 were $843,409
and $759,023, respectively.
In addition, the Plan provides for a Company contribution, or
subsidy, equal to one-quarter of the amount of each deferred salary
contribution invested directly in the Company Stock Fund. Such
Company contributions for 1996 and 1995 were $18,393 and $29,366
respectively.
In addition, at the discretion of the Board of Directors, the Company
may make a matching contribution equal to a percentage not to exceed
25% of the elective contribution, disregarding any elective
contribution in excess of 6% of such eligible participant's salary
for such Plan year. Such contribution for 1996 was $178,593; no such
contribution was made for 1995.
Participant Accounts
--------------------
A separate account is established for each participant when enrolled
in the Plan. Each participant's account is credited with participant
salary deferrals and Company contributions. An allocation of earnings
of the Funds in which such participant's account is invested was
determined by a monthly valuation and credited ratably among all
participants in each Fund prior to the conversion to Putnam Fiduciary
Trust Company. After the conversion to Putnam Fiduciary Trust
Company, valuation of individual accounts are performed daily based
on the number of shares a participant holds multiplied by the value
of the Fund. Guaranteed interest contract account earnings are valued
on a monthly basis and are allocated to participants based on a pro
rated basis.
6
<PAGE>
Notes to Financial Statements (continued)
-----------------------------------------
Investments
-----------
Prior to the conversion to Putnam Fiduciary Trust Company,
participants directed the trustee to deposit contributions in one or
more of the following investment alternatives in multiples of 10%:
(1) the Diversified Fund, managed by Frontier Capital Management,
Inc., consisting primarily of a diversified portfolio of stock and
fixed income securities; (2) the Company Stock Fund, managed by Fleet
National Bank, consisting primarily of Company common stock; (3) the
Money Market Fund, invested by Fleet National Bank through Fidelity
Management & Research Company consisting primarily of obligations of
the U.S. Government or its agencies, banks and business corporations
(other than the Company); or (4) the Guaranteed Interest Fund,
consisting primarily of guaranteed investment contracts issued by
American International Life Assurance Company of New York in 1994,
Principal Mutual Life Insurance Company in 1992 and 1993, and
Allstate Life Insurance Company in 1991. These guaranteed investment
contracts are agreements under which the issuer has agreed to pay the
investor a guaranteed rate of interest over terms ranging from 3 to 5
years. The contracts automatically terminate at maturity date. A
penalty is imposed upon early termination of contract. The issuers of
these contracts are insurance companies, and because of this, the
contracts are more susceptible to factors adversely affecting the
insurance industry than similar contracts issued by parties other
than insurance companies. Transfers between investment funds can be
made subject to certain rules.
In 1995 the Plan assets and those of the Brown & Sharpe Savings and
Retirement Plan were held in a trust administered by Fleet National
Bank as Trustee. The assets and activity within this trust were
allocated between the two plans based on the underlying participant
records of each plan.
After the transfer of assets to Putnam Fiduciary Trust Company,
participants direct the trustee to deposit contributions in one of
more of the following investment alternatives in multiples of 5%:
(1) Putnam New Opportunities Fund invests in a portfolio of stocks in
certain emerging industry groups that Putnam believes offer above-
average long-term growth potential; (2) the Company Stock Fund,
managed by Putnam Investments, consisting of Brown & Sharpe common
stock; (3) the Putnam Voyager Fund, invests in a combination of
stocks of small companies expected to grow over time as well as
stocks of larger, more established corporations; (4) the Putnam Fund
for Growth & Income, invests mainly in attractive priced stocks of
companies that offer long-term growth potential while also providing
income; (5) The George Putnam Fund of Boston, invests in stocks and
corporate and government bonds, providing a balanced way to pursue
long-term rewards; (6) the Brown & Sharpe Stable Value Fund,
consisting of guaranteed investment contracts issued by American
International Life Assurance Company of New York, Principal Mutual
Life Insurance Company and the Putnam Stable Value Fund, managed by
Putnam Investments. These individual guaranteed investment contracts
are agreements under which the issuer has agreed to pay the investor
a guaranteed rate of interest over terms ranging from 3 to 5 years.
The contracts automatically terminate at maturity date. A penalty is
imposed upon early termination of contract. The issuers of these
contracts are insurance companies, and because of this, the contracts
are more susceptible to factors adversely affecting the insurance
industry than similar contracts issued by parties other than
insurance companies. Transfers between investment funds can be made
subject to certain rules.
The Plan assets are held in a trust administered by Putnam Fiduciary
Trust Company as Trustee.
The Company pays substantially all of the expenses associated with
administering this Plan.
Benefits
--------
A participant is always vested 100% in deferred salary contributions
and Company stock purchased at a discount and becomes 100% vested in
Company contributions after 3 years of service.
7
<PAGE>
Notes to Financial Statements (continued)
-----------------------------------------
Upon termination of service, participants are eligible to receive the
vested value of their account in a lump sum payment or, if retired, in
equal annual installments over a 10-year period or deferred until a future
date no later than age 70-1/2.
While in service, a participant may apply for a hardship withdrawal of
funds subject to restrictive IRS rules and excise tax. The Plan also
permits a participant to borrow against his/her account and repay the loan
by payroll deduction.
Plan participants who are no longer employees of the Company but who have
elected to defer payment of their account balance are assessed an asset
management trust and recordkeeping fee based on actual cost. These
participant account balances amount to $454,789 at December 31, 1996.
2. Summary of Significant Accounting Policies
------------------------------------------
The preparation of financial statements in accordance with GAAP requires
the use of management's estimates.
Investments, other than insurance contracts, are stated at fair value. The
shares of registered investment companies are valued at quoted market
prices which represent the net asset values of shares held by the Plan at
year-end. Investments in securities traded on a national securities
exchange are valued at the last reported sales price on the last business
day of the year. Listed securities and governmental obligations for which
no sale was reported on that date are valued at the last reported bid
price. Investments in guaranteed interest contracts with insurance
companies are stated at contract value defined as cost plus accrued
interest less distributions to date, which approximates fair value. The
Plan loans receivable are valued at cost which approximates fair value.
Purchases and sales of securities are reflected on a trade-date basis. The
Plan presents in the statements of changes in net assets the net
appreciation (depreciation) in the fair value of its investments which
consists of the realized gains or losses and the unrealized appreciation
(depreciation) on those investments. Dividend income is accrued on the ex-
dividend date. Income from other investments is recorded as earned on an
accrual basis.
3. Tax Status
----------
The Internal Revenue Service ruled on May 9, 1995 that the Plan qualifies
under Section 401(a) of the Internal Revenue Code (IRC) and, therefore, the
related trust is not subject to tax under present income tax law. Once
qualified, the Plan is required to operate in conformity with the IRC to
maintain its qualification. Management is not aware of any course of action
or series of events that have occurred that might adversely affect the
Plan's qualified status.
4. Plan Termination
----------------
The Company adopted this Plan with a view to maintaining it permanently.
However, the Company reserves the right to modify or amend the Plan from
time to time, or to terminate the Plan, and to discontinue making
contributions temporarily or permanently depending upon business and
economic conditions. The Company cannot amend the Plan so as to deprive any
participant of benefits already accrued under the Plan at the time of
amendment, nor can the Company take back any contributions which it has
made to the Plan except in limited circumstances involving factual error or
contributions thought to be deductible which are not deductible. Should the
Plan terminate, accounts would become fully vested, regardless of years of
service, and would be paid to participants as directed by the Committee
administering the Plan.
8
<PAGE>
Notes to Financial Statements (continued)
-----------------------------------------
5. Investments
-----------
<TABLE>
<CAPTION>
Investments held at December 31, 1996 and 1995 are as follows:
Description Current Value Cost
- ----------- ------------- ----
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Investments stated at fair value:
Company common stock $ 2,624,544 $ 1,873,933 $ 1,891,267 $ 1,741,706
Diversified investments:
Government securities - 1,036,330 - 982,003
Common & preferred stock - 8,643,280 - 6,481,257
Short-term investments (1) - 882,338 - 882,338
Putnam Stable Value Fund 2,301,692 - 2,301,692 -
Registered investment companies
The George Putnam Fund of Boston 4,896,277 - 4,792,292 -
Putnam Fund for Growth & Income 4,522,002 - 4,403,848 -
Putnam Voyager Fund 3,772,403 - 3,897,881 -
Putnam New Opportunities Fund 4,546,068 - 4,613,856 -
Investments stated at contract value:
Guaranteed interest contracts 4,123,952 9,425,884 4,123,952 9,425,884
----------- ----------- ----------- -----------
Total investments $26,786,938 $21,861,765 $26,024,788 $19,513,188
=========== =========== =========== ===========
</TABLE>
(1) Short-term investments include temporary investments made within each of the
available Funds.
The following investments exceed 5% of Plan assets at December 31, 1996:
<TABLE>
<CAPTION>
Current Value
-------------
Investments stated at contract value:
<S> <C> <C>
1993 GIC Principal Mutual Life Insurance $2,225,705
Contract (3)88705-03-M
1994 GIC American International Life Assurance Company 1,721,814
Contract #18181-M
Investments stated at fair value as determined by quoted market price:
187,467.43 shares Brown & Sharpe Manufacturing Company 2,624,544
Common Stock Class A & B
298,553.518 shares The George Putnam Fund of Boston 4,896,277
250,943.511 shares Putnam Fund for Growth & Income 4,522,002
234,020.022 shares Putnam Voyager Fund 3,772,403
111,889.431 shares Putnam New Opportunities Fund 4,546,068
2,301,692 shares Putnam Stable Value Fund 2,301,692
Contract #MFPFTC
The following investments exceed 5% of Plan assets at December 31, 1995:
Current Value
-------------
Investments stated at contract value:
1991 GIC Allstate Life Insurance Company $1,065,148
Contract #GA5052
1993 GIC Principal Mutual Life Insurance 5,996,330
Contract #GA88705-3-M
1994 GIC American International Life Assurance Company 1,552,305
Contract #18181-M
Investments stated at fair value:
182,822.74 shares Brown & Sharpe Manufacturing Company 1,873,933
Common Stock Class A & B
</TABLE>
9
<PAGE>
Notes to Financial Statements (continued)
-----------------------------------------
6. Allocation of Statements of Net Assets Available for Plan Benefits and
----------------------------------------------------------------------
Statements of Income and Changes in Net Assets Available for Plan Benefits
--------------------------------------------------------------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS AT DECEMBER 31, 1996,
-------------------------------------------------------------------------
WITH FUND INFORMATION
---------------------
<TABLE>
<CAPTION>
Brown & Sharpe George
Plan Company Stable Value Putnam
Loans Stock Fund Fund Fund
----- ---------- ---- ----
<S> <C> <C> <C> <C>
Assets:
Investments $ -- $2,624,544 $6,425,644 $4,896,277
Dividend and interest receivable -- -- -- --
Employer contribution receivable -- 25,498 193,407 61,580
Plan loans receivable 487,606 -- -- --
-------- ---------- ---------- ----------
Net Assets Available for Plan Benefits $487,606 $2,650,042 $6,619,051 $4,957,857
======== ========== ========== ==========
<CAPTION>
Putnam
Growth & Putnam Putnam New
Income Voyager Opportunities
Fund Fund Fund Total
---- ---- ---- -----
<S> <C> <C> <C> <C>
Assets:
Investments $4,522,002 $3,772,403 $4,546,068 $26,786,938
Dividend and interest receivable -- -- -- --
Employer contribution receivable 139,250 160,025 263,415 843,175
Plan loans receivable -- -- -- 487,606
---------- ---------- ---------- -----------
Net Assets Available for Plan Benefits $4,661,252 $3,932,428 $4,809,483 $28,117,719
========== ========== ========== ===========
</TABLE>
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS AT DECEMBER 31, 1995,
-------------------------------------------------------------------------
WITH FUND INFORMATION
---------------------
<TABLE>
<CAPTION>
/(1)/
Money /(1)/ /(1)/ Guaranteed
Plan Market Diversified Company Interest
Loans Fund Fund Stock Fund Fund Total
----- ---- ---- ---------- ---- -----
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments $ -- $602,217 $ 9,827,923 $1,919,432 $9,512,193 $21,861,765
Dividends and interest receivable -- 2,126 32,422 52 52,242 86,842
Employer contribution receivable -- 112,039 491,748 31,165 124,071 759,023
Plan loans receivable 260,451 -- -- -- -- 260,451
-------- -------- ----------- ---------- ---------- -----------
Net Assets Available for Plan Benefits $260,451 $716,382 $10,352,093 $1,950,649 $9,688,506 $22,968,081
======== ======== =========== ========== ========== ===========
</TABLE>
(1) Includes short-term investments of $148,313 in the Diversified Fund,
$45,499 in the Company Stock Fund, and $86,309 in the Guaranteed
Interest Fund.
10
<PAGE>
Notes to Financial Statements (continued)
-----------------------------------------
6. Allocation of Statements of Net Assets Available for Plan Benefits and
----------------------------------------------------------------------
Statements of Income and Changes in Net Assets Available for Plan Benefits
--------------------------------------------------------------------------
(continued)
-----------
STATEMENT OF INCOME AND CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS FOR
-----------------------------------------------------------------------------
THE PERIOD JANUARY 1, 1996 - APRIL 30, 1996, WITH FUND INFORMATION
------------------------------------------------------------------
<TABLE>
<CAPTION>
Plan Money Market Diversified
Loans Fund Fund
----- ---- ----
<S> <C> <C> <C>
Additions
- ---------
Contributions
Employer $ -- $ 22,530 $ 110,422
Employee -- 22,343 216,771
Loan repayments (41,714) 2,114 19,597
--------- --------- ------------
(41,714) 46,987 346,790
Investment income
Interest -- 17,125 47,260
--------- --------- ------------
-- 17,125 47,260
Net appreciation (depreciation)
in fair value of investments -- -- 918,822
--------- --------- ------------
Total additions (41,714) 64,112 1,312,872
Disbursements
Payments to participants -- (447) (444,830)
Loans to participants 61,804 (10,889) (41,811)
Loan defaults (34,721) -- --
Fees -- -- --
--------- --------- ------------
Total disbursements 27,083 (11,336) (486,641)
Transfers
Transfers (to) from SARP -- 2,649 56,531
Transfers to new trustee (245,820) (905,921) (11,143,952)
Transfers between funds -- 134,114 (90,903)
--------- --------- ------------
Net transfers (245,820) (769,158) (11,178,324)
--------- --------- ------------
Net increase (decrease) (260,451) (716,382) (10,352,093)
Net assets, beginning of year 260,451 716,382 10,352,093
--------- --------- ------------
Net assets, end of period $ -- $ -- $ --
========= ========= ============
<CAPTION>
Guaranteed
Company Interest
Stock Fund Fund Total
---------- ---- -----
<S> <C> <C> <C>
Additions
Contributions
Employer $ 18,506 $ 37,905 $ 189,363
Employee 42,143 114,681 395,938
Loan repayments 2,427 17,576 --
----------- ----------- ------------
63,076 170,162 585,301
Investment income
Interest 775 190,091 255,251
----------- ----------- ------------
775 190,091 255,251
Net appreciation (depreciation)
in fair value of investments (90,740) -- 828,082
----------- ----------- ------------
Total additions (26,889) 360,253 1,668,634
Disbursements
Payments to participants (30,656) (1,047,018) (1,522,951)
Loans to participants (9,104) -- --
Loan defaults -- -- (34,721)
Fees -- -- --
----------- ----------- ------------
Total disbursements (39,760) (1,047,018) (1,557,672)
Transfers
Transfers (to) from SARP (617) 36,166 94,729
Transfers to new trustee (1,782,872) (9,095,207) (23,173,772)
Transfers between funds (100,511) 57,300 --
----------- ----------- ------------
Net transfers (1,884,000) (9,001,741) (23,079,043)
----------- ----------- ------------
Net increase (decrease) (1,950,649) (9,688,506) (22,968,081)
Net assets, beginning of year 1,950,649 9,688,506 22,968,081
----------- ----------- ------------
Net assets, end of period $ -- $ -- $ --
=========== =========== ============
</TABLE>
11
<PAGE>
Notes to Financial Statements (continued)
6. Allocation of Statements of Net Assets Available for Plan Benefits and
----------------------------------------------------------------------
Statements of Income and Changes in Net Assets Available for Plan Benefits
- --------------------------------------------------------------------------
(continued)
- -----------
STATEMENT OF INCOME AND CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS FOR
-----------------------------------------------------------------------------
THE PERIOD MAY 1, 1996 - DECEMBER 31, 1996, WITH FUND INFORMATION
-----------------------------------------------------------------
<TABLE>
<CAPTION>
Brown & Sharpe George Putnam
Plan Company Stable Value Putnam Growth & Income
Loans Stock Fund Fund Fund Fund
----- ---------- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Additions
- ---------
Contributions
Employer $ - $ 33,355 $ 193,407 $ 61,580 $ 139,250
Employee - 33,216 160,065 76,629 170,514
Loan repayments (67,589) 759 19,786 4,451 13,161
--------- ---------- ---------- ---------- ----------
(67,589) 67,330 373,258 142,660 322,925
Investment income
Interest - 207 270,624 469,339 335,329
--------- ---------- ---------- ---------- ----------
- 207 270,624 469,339 335,329
Net appreciation (depreciation)
in fair value of investments - 811,654 - 124,244 125,049
--------- ---------- ---------- ---------- ----------
Total additions (67,589) 879,191 643,882 736,243 783,303
Disbursements
Payments to participants - (28,158) (908,924) (175,953) (27,950)
Loans to participants 318,549 (3,349) (53,177) (77,365) (40,312)
Loan defaults (24,752) - - - -
Fees - - (94) (77) (69)
--------- ---------- ---------- ---------- ----------
Total disbursements 293,797 (31,507) (962,195) (253,395) (68,331)
Transfers
Transfers from ESOP - - 5,445 10,819 -
Transfers (to) from SARP - 78,881 (127,958) (636,021) 576,257
Transfers from previous trustee 234,077 1,823,981 8,909,853 11,213,854 -
Transfers from DEA 27,321 - 2,301,080 - -
Transfers between funds - (100,504) (4,151,056) (6,113,643) 3,370,023
-------- ---------- ---------- ---------- ----------
Net transfers 261,398 1,802,358 6,937,364 4,475,009 3,946,280
-------- ---------- ---------- ---------- ----------
Net increase (decrease) 487,606 2,650,042 6,619,051 4,957,857 4,661,252
Net assets, beginning of period - - - - -
-------- ---------- ---------- ---------- ----------
Net assets, end of year $487,606 $2,650,042 $6,619,051 $4,957,857 $4,661,252
======== ========== ========== ========== ==========
<CAPTION>
Putnam Putnam New
Voyager Opportunities Consolidated
Fund Fund Total Total
---- ---- ----- -----
<S> <C> <C> <C> <C>
Additions
- ---------
Contributions
Employer $ 160,025 $ 263,415 $ 851,032 $ 1,040,395
Employee 202,423 352,788 995,635 1,391,573
Loan repayments 12,677 16,755 - -
---------- ---------- ----------- -----------
375,125 632,958 1,846,667 2,431,968
Investment income
Interest 259,365 40,137 1,375,001 1,630,252
---------- ---------- ----------- -----------
259,365 40,137 1,375,001 1,630,252
Net appreciation (depreciation)
in fair value of investments (106,779) (52,600) 901,568 1,729,650
---------- ---------- ----------- -----------
Total additions 527,711 620,495 4,123,236 5,791,870
Disbursements
Payments to participants (266,259) (146,939) (1,554,183) (3,077,134)
Loans to participants (62,125) (82,221) - -
Loan defaults - - (24,752) (59,473)
Fees (70) (111) (421) (421)
---------- ---------- ----------- -----------
Total disbursements (328,454) (229,271) (1,579,356) (3,137,028)
Transfers
Transfers from ESOP - - 16,264 16,264
Transfers (to) from SARP 166,035 (1,792) 55,402 150,131
Transfers from previous trustee 992,007 - 23,173,772 -
Transfers from DEA - - 2,328,401 2,328,401
Transfers between funds 2,575,129 4,420,051 - -
---------- ---------- ----------- -----------
Net transfers 3,733,171 4,418,259 25,573,839 2,494,796
---------- ---------- ----------- -----------
Net increase (decrease) 3,932,428 4,809,483 28,117,719 5,149,638
Net assets, beginning of period - - - 22,968,081
---------- ---------- ----------- -----------
Net assets, end of year $3,932,428 $4,809,483 $28,117,719 $28,117,719
========== ========== =========== ===========
</TABLE>
12
<PAGE>
Notes to Financial Statements (continued)
-----------------------------------------
6. Allocation of Statements of Net Assets Available for Plan Benefits and
----------------------------------------------------------------------
Statements of Income and Changes in Net Assets Available for Plan Benefits
- --------------------------------------------------------------------------
(continued)
- -----------
STATEMENT OF INCOME AND CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS FOR
-----------------------------------------------------------------------------
THE YEAR ENDED DECEMBER 31, 1995, WITH FUND INFORMATION
-------------------------------------------------------
<TABLE>
<CAPTION>
Plan Money Market Diversified
Loans Fund Fund
----- ---- ----
<S> <C> <C> <C>
Additions
---------
Contributions
Employer $ - $ 112,039 $ 491,748
Employee - 69,775 659,500
Loan repayments (121,146) 4,526 48,977
---------- ---------- -----------
(121,146) 186,340 1,200,225
Investment income
Interest - 38,695 76,710
Dividends - - 36,276
---------- ---------- -----------
- 38,695 112,986
Net appreciation
in fair value of investments - - 2,051,965
---------- ---------- -----------
Total additions (121,146) 225,035 3,365,176
Disbursements
Payments to participants - (61,407) (249,068)
Loans to participants 119,450 (16,972) (76,715)
Fees - (88) (10,215)
---------- ---------- -----------
Total disbursements 119,450 (78,467) (335,998)
Transfers
Transfers (to) from ESOP - 622 138
Transfers from SARP 4,478 - 11,234
Transfers between funds - 42,564 (3,913)
---------- ---------- -----------
Net transfers 4,478 43,186 7,459
---------- ---------- -----------
Net increase (decrease) 2,782 189,754 3,036,637
Net assets, beginning of year 257,669 526,628 7,315,456
---------- ---------- -----------
Net assets, end of year $ 260,451 $ 716,382 $10,352,093
========== ========== ===========
<CAPTION>
Guaranteed
Company Interest
Stock Fund Fund Total
---------- ---- -----
<S> <C> <C> <C>
Additions
---------
Contributions
Employer $ 60,531 $ 124,071 $ 788,389
Employee 117,459 349,055 1,195,789
Loan repayments 7,706 59,937 -
---------- ---------- -----------
185,696 533,063 1,984,178
Investment income
Interest 2,281 627,050 744,736
Dividends - - 36,276
---------- ---------- -----------
2,281 627,050 781,012
Net appreciation
in fair value of investments 763,252 - 2,815,217
---------- ---------- -----------
Total additions 951,229 1,160,113 5,580,407
Disbursements
Payments to participants (148,196) (1,262,224) (1,720,895)
Loans to participants (4,019) (21,744) -
Fees (367) (1,732) (12,402)
---------- ---------- -----------
Total disbursements (152,582) (1,285,700) (1,733,297)
Transfers
Transfers (to) from ESOP (2,105) 12,728 11,383
Transfers from SARP 1,383 29,168 46,263
Transfers between funds (16,470) (22,181) -
---------- ---------- -----------
Net transfers (17,192) 19,715 57,646
---------- ---------- -----------
Net increase (decrease) 781,455 (105,872) 3,904,756
Net assets, beginning of year 1,169,194 9,794,378 19,063,325
---------- ---------- -----------
Net assets, end of year $1,950,649 $9,688,506 $22,968,081
========== ========== ===========
</TABLE>
13
<PAGE>
Notes to Financial Statements (continued)
7. Transactions with Parties-In-Interest
During the years ended December 31, 1996 and 1995, the Plan entered into
the following transactions with parties-in-interest:
<TABLE>
<CAPTION>
December 31,
------------
1996 1995
---- ----
Units/Shares Amount Units/Shares Amount
------------ ------ ------------ ------
<S> <C> <C> <C> <C>
The George Putnam Fund of Boston
--------------------------------
Purchase of face amount 771,028.83 $ 12,362,338 -- $ --
Sales of face amount 472,475.31 7,590,305 -- --
Investment income/loss -- 20,259 -- --
Putnam Fund for Growth and Income
---------------------------------
Purchase of face amount 259,811.96 $ 4,555,765 -- $ --
Sales of face amount 8,868.45 158,812 -- --
Investment income/loss -- 6,895 -- --
Putnam Voyager Fund
-------------------
Purchase of face amount 283,024.21 $ 4,848,832 -- $ --
Sales of face amount 49,004.19 969,650 -- --
Investment income/loss -- 18,699 -- --
Putnam Stable Value Fund
------------------------
Purchase of face amount 6,284,070.00 $ 6,284,070 -- $ --
Sales of face amount 3,982,378.00 3,982,378 -- --
Investment income/loss -- -- -- --
</TABLE>
14
<PAGE>
Notes to Financial Statements (continued)
7. Transactions with Parties-In-Interest
During the years ended December 31, 1996 and 1995, the Plan entered into
the following transactions with parties-in-interest:
<TABLE>
<CAPTION>
December 31,
------------
1996 1995
---- ----
Units/Shares Amount Units/Shares Amount
------------ ------ ------------ ------
<S> <C> <C> <C> <C>
Putnam New Opportunities Fund
- -----------------------------
Purchase of face amount 130,766.22 $ 5,386,115 -- $ --
Sales of face amount 18,876.79 787,447 -- --
Investment income/loss -- 15,188 -- --
Fleet National Bank Cash Management
- -----------------------------------
Purchase of face amount 21,349,611.00 $ 21,349,611 -- $ 6,581,041
Sales of face amount 22,231,949.00 22,231,949 -- 6,814,326
Investment income/loss -- -- -- 17,253
Fleet Financial Group, Inc.
- ---------------------------
Purchase of face amount 2,271.00 $ 98,498 -- $ --
Sales of face amount 2,271.00 92,653 -- --
Investment income/loss -- (5,846) -- --
Brown & Sharpe Manufacturing Company
- ------------------------------------
Purchases of capital stock 40,983.83 $ 467,490 2,939 $ 20,074
Distributions of capital stock to
participants 2,483.49 28,449 4,518 43,224
Sales of capital stock, at market
value 33,855.65 409,344 -- --
Investment income/loss -- -- 119,864 --
</TABLE>
15
<PAGE>
BROWN & SHARPE SAVINGS & RETIREMENT PLAN FOR MANAGEMENT EMPLOYEES
SCHEDULE OF REPORTABLE TRANSACTIONS
For the Year Ended December 31, 1996
------------------------------------
<TABLE>
<CAPTION>
Category (i) An individual transaction in excess of 5% of plan assets
- -----------------------------------------------------------------------
Identity of Party Involved Description of Assets Purchase Price Selling Price Cost of Asset
- -------------------------- --------------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
Putnam Fiduciary Trust Company The George Putnam Fund of Boston
Sold $6,239,569.20 face amount $ - $ 6,239,569 $ 6,266,375
Purchased $11,213,854 face amount 11,213,854 - 11,213,854
Putnam Fund for Growth and Income
Purchased $2,652,521 face amount 2,652,521 - 2,652,521
Putnam Voyager Fund
Purchased $2,766,997 face amount 2,766,997 - 2,766,997
Putnam Stable Value Fund
Sold $3,710,378 face amount - 3,710,378 3,710,378
Putnam New Opportunities Fund
Purchased $4,248,162 face amount 4,248,162 - 4,248,162
Fleet National Bank Fleet National Bank Cash Management
Sold $11,156,735 face amount - 11,156,735 11,156,735
Purchased $7,430,136 face amount 7,430,136 - 7,430,136
Purchased $2,657,361 face amount 2,657,361 - 2,657,361
Purchased $1,866,427 face amount 1,866,427 - 1,866,427
Sold $1,914,700 face amount - 1,914,700 1,914,700
<CAPTION>
Current Value of
----------------
Identity of Party Involved Description of Assets Asset on Transaction Net Gain
- -------------------------- --------------------- -------------------- --------
Date (Loss)
---- ------
<S> <C> <C> <C>
Putnam Fiduciary Trust Company The George Putnam Fund of Boston
Sold $6,239,569.20 face amount $ 6,239,569 $ (26,806)
Purchased $11,213,854 face amount 11,213,854 -
Putnam Fund for Growth and Income
Purchased $2,652,521 face amount 2,652,521 -
Putnam Voyager Fund
Purchased $2,766,997 face amount 2,766,997 -
Putnam Stable Value Fund
Sold $3,710,378 face amount 3,710,378 -
Putnam New Opportunities Fund
Purchased $4,248,162 face amount 4,248,162 -
Fleet National Bank Fleet National Bank Cash Management
Sold $11,156,735 face amount 11,156,735 -
Purchased $7,430,136 face amount 7,430,136 -
Purchased $2,657,361 face amount 2,657,361 -
Purchased $1,866,427 face amount 1,866,427 -
Sold $1,914,700 face amount 1,914,700 -
</TABLE>
16
<PAGE>
BROWN & SHARPE SAVINGS & RETIREMENT PLAN FOR MANAGEMENT EMPLOYEES
SCHEDULE OF REPORTABLE TRANSACTIONS (continued)
For the Year Ended December 31, 1996
------------------------------------
Category (i) An individual transaction in excess of 5% of plan assets
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
Identity of Party Involved Description of Assets Purchase Price Selling Price Cost of Asset
- -------------------------- --------------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
Fleet National Bank Purchased $2,004,119 face amount $ 2,004,119 - $ 2,004,119
Sold $1,829,705 face amount - 1,829,705 1,829,705
Principal Mutual Life Ins. Co. Principal Mutual Life Insurance Co.,
GIC (3)88705-03-M
Sold $2,004,119 face amount - 2,004,119 2,004,119
<CAPTION>
Current Value of
----------------
Asset on Transaction Net Gain
-------------------- --------
Identity of Party Involved Description of Assets Date (Loss)
- -------------------------- --------------------- ---- ------
<S> <C> <C> <C>
Fleet National Bank Purchased $2,004,119 face amount $ 2,004,119 -
Sold $1,829,705 face amount 1,829,705 -
Principal Mutual Life Ins. Co. Principal Mutual Life Insurance Co.,
GIC (3)88705-03-M
Sold $2,004,119 face amount 2,004,119 -
</TABLE>
17
<PAGE>
BROWN & SHARPE SAVINGS & RETIREMENT PLAN FOR MANAGEMENT EMPLOYEES
SCHEDULE OF REPORTABLE TRANSACTIONS
For the Year Ended December 31, 1996
------------------------------------
Category (iii) A series of securities transactions in excess of 5% of plan
- --------------------------------------------------------------------------
assets
- ------
<TABLE>
<CAPTION>
Identity of Party Involved Description of Assets Purchase Price Selling Price Cost of Asset
- -------------------------- --------------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
Putnam Fiduciary Trust Company The George Putnam Fund of Boston
Purchased $12,362,338 face amount in
70 transactions $ 12,362,338 $ - $ 12,362,338
Sold $7,590,305 face amount in 58
transactions - 7,590,305 7,570,046
Putnam Fund for Growth and Income
Purchased $4,555,765 face amount in 85
transactions 4,555,765 - 4,555,765
Sold $158,812 face amount in 40
transactions - 158,812 151,917
Putnam Voyager Fund
Purchased $4,848,832 face amount in
84 transactions 4,848,832 - 4,848,832
Sold $969,650 face amount in 42
transactions - 969,650 950,951
Putnam Stable Value Fund
Purchased $6,284,070 face amount in 128
transactions 6,284,070 - 6,284,070
Sold $3,982,378 face amount in 65
transactions - 3,982,378 3,982,378
Putnam New Opportunities Fund
Purchased $5,386,115 face amount in
85 transactions 5,386,115 - 5,386,115
Sold $787,447 face amount in 48
transactions - 787,447 772,259
<CAPTION>
Current Value of
----------------
Identity of Party Involved Description of Assets Asset on Transaction Net Gain
- -------------------------- --------------------- -------------------- --------
Date (Loss)
---- ------
<S> <C> <C> <C>
Putnam Fiduciary Trust Company The George Putnam Fund of Boston
Purchased $12,362,338 face amount in
70 transactions $ 12,362,338 $ -
Sold $7,590,305 face amount in 58
transactions 7,590,305 20,259
Putnam Fund for Growth and Income
Purchased $4,555,765 face amount in 85
transactions 4,555,765 -
Sold $158,812 face amount in 40
transactions 158,812 6,895
Putnam Voyager Fund
Purchased $4,848,832 face amount in
84 transactions 4,848,832 -
Sold $969,650 face amount in 42
transactions 969,650 18,699
Putnam Stable Value Fund
Purchased $6,284,070 face amount in 128
transactions 6,284,070 -
Sold $3,982,378 face amount in 65
transactions 3,982,378 -
Putnam New Opportunities Fund
Purchased $5,386,115 face amount in
85 transactions 5,386,115 -
Sold $787,447 face amount in 48
transactions 787,447 15,188
</TABLE>
18
<PAGE>
BROWN & SHARPE SAVINGS & RETIREMENT PLAN FOR MANAGEMENT EMPLOYEES
SCHEDULE OF REPORTABLE TRANSACTIONS (continued)
For the Year Ended December 31, 1996
------------------------------------
Category (iii) A series of securities transactions in excess of 5% of plan
- --------------------------------------------------------------------------
assets
- ------
<TABLE>
<CAPTION>
Identity of Party Involved Description of Assets Purchase Price Selling Price Cost of Asset
- -------------------------- --------------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
Fleet National Bank Fleet National Bank Cash Management
Purchased $21,349,611 face amount in
117 transactions $ 21,349,611 - $ 21,349,611
Sold $22,231,949 face amount in 65
transactions - 22,231,949 22,231,949
Principal Mutual Life Insurance Principal Mutual Life Insurance Company
Company Contract No. (3) 88705-M
Purchased $31,600 face amount in 1
transaction 31,600 - 31,600
Sold $3,802,225 face amount in 17
transactions - 3,802,225 3,802,225
<CAPTION>
Current Value of
----------------
Identity of Party Involved Description of Assets Asset on Transaction Net Gain
- -------------------------- --------------------- -------------------- --------
Date (Loss)
---- ------
<S> <C> <C> <C>
Fleet National Bank Fleet National Bank Cash Management
Purchased $21,349,611 face amount in
117 transactions $ 21,349,611 -
Sold $22,231,949 face amount in 65
transactions 22,231,949 -
Principal Mutual Life Insurance Principal Mutual Life Insurance Company
Company Contract No. (3) 88705-M
Purchased $31,600 face amount in 1
transaction 31,600 -
Sold $3,802,225 face amount in 17
transactions 3,802,225 -
</TABLE>
19
<PAGE>
Brown & Sharpe Savings & Retirement Plan For Management Employees
Schedule of Assets Held for Investment Purposes
At December 31, 1996
<TABLE>
<CAPTION>
Cost of
Shares or Face Value Description Fair Value Investment
==========================================================================================================================
<S> <C> <C> <C>
298,553.518 shares The George Putnam Fund of Boston
Balanced fund consisting of stocks and corporate $ 4,896,277 $ 4,792,292
and government bonds
Putnam New Opportunities Fund
111,889.431 shares Long-term growth funds consisting of stock of 4,546,068 4,613,856
certain emerging industry groups that in Putnam
Investments view offer long term growth potential
Putnam Voyager Fund
234,020.022 shares A combination of stocks of small companies expected 3,772,403 3,897,881
to grow over time in addition to stocks of larger more
established corporations
Brown & Sharpe Company Stock Fund
187,467.43 shares Consisting of 187,467.43 shares of Brown & Sharpe 2,624,544 1,891,267
Class A & B Common Stock
Putnam Fund for Growth & Income
250,943.511 shares A combination of attractive priced stocks of companies 4,522,002 4,403,848
viewed by Putnam to offer long-term growth potential
while also providing income
Brown & Sharpe Stable Value Fund
$1,721,814 face value American International Life Assurance Company 1,721,814 1,721,814
$2,225,705 face value Principal Mutual Life Insurance Company (3)88705-03-M 2,225,705 2,225,705
$176,433 face value Principal Mutual Life Insurance Company (3)88705-02-M 176,433 176,433
2,301,692 shares Putnam Stable Value Fund 2,301,692 2,301,692
------------ ------------
TOTAL INVESTMENTS $ 26,786,938 $ 26,024,788
Plan Loan Receivable 487,606 487,606
------------ ------------
TOTAL ASSETS HELD FOR INVESTMENTS $ 27,274,544 $ 26,512,394
============ ============
</TABLE>
20
<PAGE>
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statements
(Form S-8 Nos. 2-33676, 2-56821, 2-60398, 2-77219, 2-77575, 2-83637, 2-97935,
33-17831, 33-23601, 33-23603, 33-30927, and 33-54496) of Brown & Sharpe
Manufacturing Company of our report dated June 23, 1997, with respect to the
financial statements and schedules of the Brown & Sharpe Savings and Retirement
Plan for Management Employees included in this Annual Report (Form 11-K) for the
year ended December 31, 1996.
ERNST & YOUNG LLP
Providence, Rhode Island
June 23, 1997
21
<PAGE>
Exhibit 28.2
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 11-K
Annual Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
For the Fiscal Year Ended December 31, 1996
-----------------
Commission File Number 1-5881
------
THE BROWN & SHARPE SAVINGS AND RETIREMENT PLAN
----------------------------------------------
(Full Title of the Plan)
BROWN & SHARPE MANUFACTURING COMPANY
200 Frenchtown Road
North Kingstown, Rhode Island 02852-1700
(401) 886-2000
(Name of Issuer and Address of its Principal Executive Office)
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Plan has duly caused this Annual Report to be signed on its behalf by the
undersigned, thereunto duly authorized, in North Kingstown, Rhode Island, on the
23rd day of June 1997.
- ---- ---------
BROWN & SHARPE SAVINGS & RETIREMENT PLAN
By: /s/ Alfred J. Corso
-------------------------
Alfred J. Corso
Controller
(Principal Accounting Officer)
2
<PAGE>
THE BROWN & SHARPE SAVINGS AND RETIREMENT PLAN
----------------------------------------------
<TABLE>
<CAPTION>
Table of Contents
-----------------
Page
----
<S> <C>
Report of Ernst & Young LLP, Independent Auditors 4
Financial Statements:
Statements of Net Assets Available for Plan Benefits
at December 31, 1996 and 1995 5
Statements of Changes in Net Assets Available for Plan
Benefits for the Years Ended December 31, 1996 and 1995 5
Notes to Financial Statements 6 - 15
Supplemental Schedules:
Schedule of Reportable Transactions 16 - 19
Schedule of Assets Held for Investment Purposes at December 31, 1996 20
Consent of Independent Auditors 21
</TABLE>
3
<PAGE>
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
-------------------------------------------------
Brown & Sharpe Savings and Retirement Plan Committee
Brown & Sharpe Manufacturing Company
We have audited the accompanying statements of net assets available for
plan benefits of the Brown & Sharpe Savings and Retirement Plan (the "Plan") as
of December 31, 1996 and 1995, and the related statements of changes in net
assets available for plan benefits for the years then ended. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for benefits of the
Plan at December 31, 1996 and 1995, and the changes in its net assets available
for benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audit was made for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying supplemental schedules
of assets held for investment purposes as of December 31, 1996, and reportable
transactions for the year then ended, are presented for purposes of complying
with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974, and are
not a required part of the financial statements. The supplemental schedules have
been subjected to the auditing procedures applied in our audits of the financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the financial statements taken as a whole.
ERNST & YOUNG LLP
June 23, 1997
4
<PAGE>
THE BROWN & SHARPE SAVINGS & RETIREMENT PLAN
--------------------------------------------
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
----------------------------------------------------
<TABLE>
<CAPTION>
As of December 31,
-----------------
1996 1995
---- ----
<S> <C> <C>
Assets
- ------
Investments (Notes 2 and 5) $ 6,212,169 $ 5,569,599
Dividends and interest receivable - 24,260
Employer contribution receivable 196,896 181,813
Plan loans receivable 164,879 70,355
------------ ------------
Net Assets Available for Plan Benefits $ 6,573,944 $ 5,846,027
============ ============
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF INCOME AND CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
--------------------------------------------------------------------------
For the years ended December 31,
--------------------------------
1996 1995
---- ----
<S> <C> <C>
Additions
- ---------
Contributions
Employer $ 239,804 $ 189,035
Employee 357,515 295,062
------------ ------------
597,319 484,097
Investment income
Interest 419,612 230,153
Dividends - 7,202
------------ ------------
419,612 237,355
Net appreciation
in fair value of investments 425,218 514,075
------------ ------------
Total additions 1,442,149 1,235,527
Deductions
Payments to participants (590,325) (744,842)
Forfeitures - (580)
Fees (255) (2,955)
------------ ------------
Total deductions (590,580) (748,377)
Transfers
From Brown & Sharpe Employee Stock Owner-
ship & Profit Participation Plan (ESOP) 26,479 6,487
To Brown & Sharpe Savings & Retirement
Plan for Management Employees (SARP-M) (150,131) (46,263)
------------ ------------
Net transfers (123,652) (39,776)
------------ ------------
Net increase in assets 727,917 447,374
Net assets, beginning of year 5,846,027 5,398,653
------------ ------------
Net assets, end of year $ 6,573,944 $ 5,846,027
============ ============
</TABLE>
See notes to the financial statements.
5
<PAGE>
THE BROWN & SHARPE SAVINGS & RETIREMENT PLAN
Notes To Financial Statements
-----------------------------
1. Plan Description
----------------
The following description of the Brown & Sharpe Savings and Retirement Plan
(the "Plan") provides only general information. Participants should refer
to the Summary Plan Description for more complete details.
General
-------
The Plan, which began on October 1, 1987, is a defined contribution
plan covering all eligible full-time employees covered by a collective
bargaining agreement of Brown & Sharpe Manufacturing Company (the
"Company") and its affiliated companies who participate in the Plan.
Such employees are immediately eligible to make deferred salary
contributions to the Plan. One year of service is required to become a
participant receiving Company contributions. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974
(ERISA) as amended.
On May 6, 1996, the assets of the Plan were transferred from Fleet
National Bank to Putnam Fiduciary Trust Company which was appointed new
Trustee and Recordkeeper.
Contributions
-------------
The Plan permits a participant to make deferred salary contributions to
the Plan up to 16% of compensation up to a maximum of $9,500 in 1996
and $9,240 in 1995 (indexed in future years) which is not subject to
federal income tax until distributed. Contributions are invested at the
direction of the employee in one or more investment alternatives, or
"Funds," as described below.
The Company may, at the discretion of the Board of Directors, make a
supplemental contribution of 4% of annual compensation plus 4% of the
amount over the Social Security wage base to the account of each
participant to be invested as instructed by the participant. The
Company's supplemental contributions for 1996 and 1995 were $196,896
and $181,813 respectively.
In addition, the Plan provides for a Company contribution, or subsidy,
equal to one-quarter of the amount of each deferred salary contribution
invested directly in the Company Stock Fund. Such Company contributions
for 1996 and 1995 were $5,667 and $7,222 respectively.
In addition, at the discretion of the Board of Directors, the Company
may make a matching contribution equal to a percentage not to exceed
25% of the elective contribution, disregarding any elective
contribution in excess of 6% of such eligible participant's salary for
such Plan year. Such contribution for 1996 was $37,241; no such amounts
were paid in 1995.
Participant Accounts
--------------------
A separate account is established for each participant when enrolled
in the Plan. Each participant's account is credited with participant
salary deferrals and Company contributions. An allocation of earnings
of the Funds in which such participant's account is invested was
determined by a monthly valuation and credited ratably among all
participants in each Fund prior to the conversion to Putnam Fiduciary
Trust Company. After the conversion to Putnam Fiduciary Trust Company,
valuation of individual accounts are performed daily based on the
number of shares a participant holds multiplied by the value of the
Fund. Guaranteed interest contract account earnings are valued on a
monthly basis and are allocated to participants based on a pro rated
basis.
6
<PAGE>
Notes to Financial Statements (continued)
-----------------------------------------
Investments
-----------
Prior to the conversion to Putnam Fiduciary Trust Company, participants
directed the trustee to deposit contributions in one or more of the
following investment alternatives in multiples of 10%:
(1) the Diversified Fund, managed by Frontier Capital Management, Inc.,
consisting primarily of a diversified portfolio of stock and fixed
income securities; (2) the Company Stock Fund, managed by Fleet National
Bank, consisting primarily of Company common stock and cash; (3) the
Money Market Fund, invested by Fleet National Bank through Fidelity
Management & Research Company, consisting primarily of obligations of
the U.S. Government or its agencies, banks and business corporations
(other than the Company); or (4) the Guaranteed Interest Fund,
consisting primarily of guaranteed investment contracts issued by
American International Life Assurance Company of New York, Principal
Mutual Life Insurance Company, and Allstate Life Insurance Company.
These guaranteed investment contracts are agreements under which the
issuer has agreed to pay the investor a guaranteed rate of interest over
terms ranging from 3 to 5 years. The contracts automatically terminate
at maturity date. A penalty is imposed upon early termination of
contract. The issuers of these contracts are insurance companies, and
because of this, the contracts are more susceptible to factors adversely
affecting the insurance industry than similar contracts issued by
parties other than insurance companies. Transfers between investment
funds can be made subject to certain rules.
In 1995, the Plan assets, and those of the Brown & Sharpe Savings and
Retirement Plan were held in a trust administered by Fleet National Bank
as Trustee. The assets and activity within this trust were allocated
between the two plans based on the underlying participant records of
each plan.
After the transfer of assets to Putnam Fiduciary Trust Company,
participants direct the trustee to deposit contributions in one of more
of the following investment alternatives in multiples of 5%:
(1) Putnam New Opportunities Fund invests in a portfolio of stocks in
certain emerging industry groups that Putnam believes offer above-
average long-term growth potential; (2) the Company Stock Fund, managed
by Putnam Investments, consisting of Brown & Sharpe common stock; (3)
the Putnam Voyager Fund, invests in a combination of stocks of small
companies expected to grow over time as well as stocks of larger, more
established corporations; (4) the Putnam Fund for Growth & Income,
invests mainly in attractive priced stocks of companies that offer long-
term growth potential while also providing income; (5) The George Putnam
Fund of Boston, invests in stocks and corporate and government bonds,
providing a balanced way to pursue long-term rewards; (6) the Brown &
Sharpe Stable Value Fund, consisting of guaranteed investment contracts
issued by American International Life Assurance Company of New York,
Principal Mutual Life Insurance Company and the Putnam Stable Value
Fund, managed by Putnam Investments. These individual guaranteed
investment contracts are agreements under which the issuer has agreed to
pay the investor a guaranteed rate of interest over terms ranging from 3
to 5 years. The contracts automatically terminate at maturity date. A
penalty is imposed upon early termination of contract. The issuers of
these contracts are insurance companies, and because of this, the
contracts are more susceptible to factors adversely affecting the
insurance industry than similar contracts issued by parties other than
insurance companies. Transfers between investment funds can be made
subject to certain rules.
The Plan assets are held in a trust administered by Putnam Fiduciary
Trust Company as Trustee.
The Company pays substantially all of the expenses associated with
administering the Plan.
Benefits
--------
A participant is always vested 100% in deferred salary contributions and
Company stock purchased at a discount and becomes 100% vested in Company
contributions after 3 years of service.
7
<PAGE>
Notes to Financial Statements (continued)
-----------------------------------------
Upon termination of service, participants are eligible to receive the
vested value of their account in a lump sum payment or, if retired, in
equal annual installments over a 10-year period or deferred until a
future date no later than age 70-1/2.
While in service, a participant may apply for a hardship withdrawal of
funds subject to restrictive IRS rules and excise tax. The Plan also
permits a participant to borrow against his/her account and repay the
loan by payroll deduction.
Plan participants who are no longer employees of the Company, but who
have elected to defer payment of their account balance, are assessed an
asset management trust and recordkeeping fee based on actual cost.
These participant account balances amount to $79,787 at December 31,
1996.
2. Summary of Significant Accounting Policies
------------------------------------------
The preparation of financial statements in accordance with GAAP requires the
use of management's estimates.
Investments, other than insurance contracts, are stated at fair value. The
shares of registered investment companies are valued at quoted market prices
which represent the net asset values of shares held by the Plan at year-end.
Investments in securities traded on a national securities exchange are
valued at the last reported sales price on the last business day of the
year. Listed securities and governmental obligations for which no sale was
reported on that date are valued at the last reported bid price. Investments
in guaranteed interest contracts with insurance companies are stated at
contract value defined as cost plus accrued interest less distributions to
date, which approximates fair value. The Plan loans receivable are valued at
cost which approximates fair value. Purchases and sales of securities are
reflected on a trade-date basis. The Plan presents in the statements of
changes in net assets the net appreciation (depreciation) in the fair value
of its investments which consists of the realized gains or losses and the
unrealized appreciation (depreciation) on those investments. Dividend income
is accrued on the ex-dividend date. Income from other investments is
recorded as earned on an accrual basis.
3. Tax Status
----------
The Internal Revenue Service ruled on April 11, 1995, that the Plan
qualifies under Section 401(a) of the Internal Revenue Code (IRC) and,
therefore, the related trust is not subject to tax under present income tax
law. Once qualified, the Plan is required to operate in conformity with the
IRC to maintain its qualification. Management is not aware of any course of
action or series of events that have occurred that might adversely affect
the Plan's qualified status.
4. Plan Termination
----------------
The Company adopted this Plan with a view to maintaining it permanently.
However, the Company reserves the right to modify or amend the Plan from
time to time, or to terminate the Plan, and to discontinue making
contributions temporarily or permanently depending upon business and
economic conditions. The Company cannot amend the Plan so as to deprive any
participant of benefits already accrued under the Plan at the time of
amendment, nor can the Company take back any contributions which it has made
to the Plan except in limited circumstances involving factual error or
contributions thought to be deductible which are not deductible. Should the
Plan terminate, accounts would become fully vested, regardless of years of
service, and would be paid to participants as directed by the Committee
administering the Plan.
8
<PAGE>
Notes to Financial Statements (continued)
-----------------------------------------
5. Investments
-----------
Investments held at December 31, 1996 and 1995 are as follows:
<TABLE>
<CAPTION>
Description Current Value Cost
----------- ------------- ----
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Investments stated at fair value:
Company common stock $ 434,498 $ 373,420 $ 283,136 $ 347,071
Diversified investments:
Government securities - 194,591 - 184,390
Common & preferred stock - 1,622,939 - 1,216,984
Short-term investments (1) - 197,381 - 197,381
Putnam Stable Value Fund 629,947 - 629,947 -
Registered Investment companies
The George Putnam Fund of Boston 1,202,853 - 1,178,067 -
Putnam Fund for Growth & Income 804,855 - 776,968 -
Putnam Voyager Fund 546,471 - 562,950 -
Putnam New Opportunities Fund 1,149,331 - 1,168,310 -
Investments stated at contract value:
Guaranteed interest contracts 1,444,214 3,181,268 1,444,214 3,181,268
----------- ----------- ----------- -----------
Total investments $6,212,169 $5,569,599 $6,043,592 $5,127,094
=========== =========== =========== ===========
</TABLE>
(1) Short-term investments include temporary investments made within each of
the available Funds.
The following investments exceed 5% of Plan assets at December 31, 1996:
<TABLE>
<CAPTION>
Current Value
-------------
<S> <C> <C>
Investments stated at contract value:
1993 GIC Principal Mutual Life Insurance $ 754,939
Contract # (3)88705-03-H
1994 GIC American International Life Assurance Company 647,245
Contract #18181-H
Investments stated at fair value as determined by quoted market price:
31,035.57 shares Brown & Sharpe Manufacturing Company 434,498
Common Stock Class A & B
73,344.74 shares The George Putnam Fund of Boston 1,202,853
44,664.55 shares Putnam Fund for Growth & Income 804,855
33,900.16 shares Putnam Voyager Fund 546,471
28,287.72 shares Putnam New Opportunities Fund 1,149,331
629,947 shares Putnam Stable Value Fund 629,947
<CAPTION>
The following investments exceed 5% of Plan assets at December 31, 1995:
Current Value
-------------
<S> <C> <C>
Investments stated at contract value:
1991 GIC Allstate Life Insurance Company $ 347,351
Contract #GA5052
1993 GIC Principal Mutual Life Insurance 2,045,067
Contract #GA88705-3-H
1994 GIC American International Life Assurance Company 529,418
Contract #18181-H
Investments stated at fair value:
36,431.26 shares Brown & Sharpe Manufacturing Company 373,420
Common Stock Class A & B
</TABLE>
9
<PAGE>
Notes to Financial Statements (continued)
-----------------------------------------
6. Allocation of Statements of Net Assets Available for Plan Benefits and
----------------------------------------------------------------------
Statements of Income and Changes in Net Assets Available for Plan Benefits
--------------------------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS AT DECEMBER 31, 1996, WITH FUND INFORMATION
- -----------------------------------------------------------------------------------------------
Brown & Sharpe George
Plan Company Stable Value Putnam
Loans Stock Fund Fund Fund
----- ---------- ---- ----
<S> <C> <C> <C> <C>
Assets:
Investments $ - $434,498 $2,074,161 $1,202,853
Dividend and interest receivable - - - -
Employer contribution receivable - 6,181 48,088 18,860
Plan loans receivable 164,879 - - -
-------- -------- ---------- ----------
Net Assets Available for Plan Benefits $164,879 $440,679 $2,122,249 $1,221,713
======== ======== ========== ==========
<CAPTION>
Putnam
Growth & Putnam Putnam New
Income Voyager Opportunities
Fund Fund Fund Total
---- ---- ---- -----
<S> <C> <C> <C> <C>
Assets:
Investments $804,855 $546,471 $1,149,331 $6,212,169
Dividend and interest receivable - - - -
Employer contribution receivable 36,516 30,873 56,378 196,896
Plan loans receivable - - - 164,879
-------- -------- ---------- ----------
Net Assets Available for Plan Benefits $841,371 $577,344 $1,205,709 $6,573,944
======== ======== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS AT DECEMBER 31, 1995, WITH FUND INFORMATION
-----------------------------------------------------------------------------------------------
Money (1)
Plan Market Diversified
Loans Fund Fund
----- ---- ----
<S> <C> <C> <C>
Assets:
Investments $ - $131,413 $1,845,379
Dividends and interest receivable - 418 6,130
Plan loans receivable 70,355 - -
Employer contributions receivable - 8,915 105,720
------- -------- ----------
Net Assets Available for Plan Benefits $70,355 $140,746 $1,957,229
======= ======== ==========
<CAPTION>
(1)
(1) Guaranteed
Company Interest
Stock Fund Fund Total
---------- ---- -----
<S> <C> <C> <C>
Assets:
Investments $382,150 $3,210,657 $5,569,599
Dividends and interest receivable 11 17,701 24,260
Plan loans receivable - - 70,355
Employer contributions receivable 6,491 60,687 181,813
-------- ---------- ----------
Net Assets Available for Plan Benefits $388,652 $3,289,045 $5,846,027
======== ========== ==========
</TABLE>
/(1)/ Includes short-term investments of $27,849 in the Diversified Fund, $8,730
in the Company Stock Fund, and $29,389 in the Guaranteed Interest Fund.
10
<PAGE>
Notes to Financial Statements (continued)
-----------------------------------------
6. Allocation of Statements of Net Assets Available for Plan Benefits and
----------------------------------------------------------------------
Statements of Income and Changes in Net Assets Available for Plan Benefits
- --------------------------------------------------------------------------
(continued)
- -----------
STATEMENT OF INCOME AND CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS FOR
- -----------------------------------------------------------------------------
THE PERIOD JANUARY 1, 1996 - APRIL 30, 1996, WITH FUND INFORMATION
- ------------------------------------------------------------------
<TABLE>
<CAPTION>
Plan Money Market Diversified
Loans Fund Fund
----- ---- ----
<S> <C> <C> <C>
Additions
---------
Contributions
Employer $ - $ 2,454 $ 19,992
Employee - 1,095 40,314
Loan repayments (12,574) - 4,521
------------ ------------ -----------
(12,574) 3,549 64,827
Investment income
Interest - 2,688 628
------------ ------------ -----------
- 2,688 628
Net appreciation
in fair value of investments - - 186,515
------------ ------------ -----------
Total additions (12,574) 6,237 251,970
Disbursements
Payments to participants - - (5,000)
Loans to participants 18,500 (740) (17,760)
Fees - - -
------------ ------------ -----------
Total disbursements 18,500 (740) (22,760)
Transfers
Transfers (to) from SARP-M - (4,045) (56,426)
Transfers to new trustee (76,281) (140,409) (2,168,209)
Transfers between funds - (1,789) 38,196
------------ ------------ -----------
Net transfers (76,281) (146,243) (2,186,439)
------------ ------------ -----------
Net increase (decrease) (70,355) (140,746) (1,957,229)
Net assets, beginning of period 70,355 140,746 1,957,229
------------ ------------ -----------
Net assets, end of year $ - $ - $ -
============ ============ ===========
<CAPTION>
Guaranteed
Company Interest
Stock Fund Fund Total
---------- ---- -----
<S> <C> <C> <C>
Additions
---------
Contributions
Employer $ 3,798 $ 13,412 $ 39,656
Employee 9,659 41,975 93,043
Loan repayments 3,704 4,349 -
------------ ------------ -----------
17,161 59,736 132,699
Investment income
Interest 633 68,317 72,266
------------ ------------ -----------
633 68,317 72,266
Net appreciation
in fair value of investments (19,269) - 167,246
------------ ------------ -----------
Total additions (1,475) 128,053 372,211
Disbursements
Payments to participants - - (5,000)
Loans to participants - - -
Fees - - -
------------ ------------ -----------
Total disbursements - - (5,000)
Transfers
Transfers (to) from SARP-M 511 (34,769) (94,729)
Transfers to new trustee (402,200) (3,331,410) (6,118,509)
Transfers between funds 14,512 (50,919) -
------------ ------------ -----------
Net transfers (387,177) (3,417,098) (6,213,238)
------------ ------------ -----------
Net increase (decrease) (388,652) (3,289,045) (5,846,027)
Net assets, beginning of period 388,652 3,289,045 5,846,027
------------ ------------ -----------
Net assets, end of year $ - $ - $ -
============ ============ ===========
</TABLE>
11
<PAGE>
Notes to Financial Statements (continued)
-----------------------------------------
6. Allocation of Statements of Net Assets Available for Plan Benefits and
----------------------------------------------------------------------
Statements of Income and Changes in Net Assets Available for Plan Benefits
--------------------------------------------------------------------------
(continued)
-----------
STATEMENT OF INCOME AND CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS FOR
- -----------------------------------------------------------------------------
THE PERIOD MAY 1, 1996 - DECEMBER 31, 1996, WITH FUND INFORMATION
- -----------------------------------------------------------------
<TABLE>
<CAPTION>
Brown & Sharpe George Putnam
Plan Company Stable Value Putnam Growth & Income
Loans Stock Fund Fund Fund Fund
----- ---------- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Additions
- ---------
Contributions
Employer $ - $ 9,433 $ 48,088 $ 18,860 $ 36,516
Employee - 12,024 36,292 26,293 58,222
Loan repayments (22,922) 798 2,195 2,200 6,973
-------------- --------------- --------------- --------------- -------------
(22,922) 22,255 86,575 47,353 101,711
Investment income
Interest - 103 131,737 109,113 61,203
-------------- --------------- --------------- --------------- -------------
- 103 131,737 109,113 61,203
Net appreciation (depreciation)
in fair value of investments - 231,306 - 33,216 28,984
-------------- --------------- --------------- --------------- -------------
Total additions (22,922) 253,664 218,312 189,682 191,898
Disbursements
Payments to participants - (31,277) (499,776) (54,272) -
Loans to participants 111,520 (2,792) (15,784) (27,566) (15,443)
Fees - - (47) (64) (29)
-------------- --------------- --------------- --------------- -------------
Total disbursements 111,520 (34,069) (515,607) (81,902) (15,472)
Transfers
Transfers from ESOP - - 15,962 10,517 -
Transfers (to) from SARP-M - (134,797) (1,038,497) (1,082,469) 644,707
Transfers from previous trustee 76,281 355,881 3,468,935 2,217,412 -
Transfers between funds - - (26,856) (31,527) 20,238
-------------- --------------- --------------- --------------- -------------
Net transfers 76,281 221,084 2,419,544 1,113,933 664,945
-------------- --------------- --------------- --------------- -------------
Net increase (decrease) 164,879 440,679 2,122,249 1,221,713 841,371
Net assets, beginning of period - - - - -
-------------- --------------- --------------- --------------- -------------
Net assets, end of year $ 164,879 $ 440,679 $ 2,122,249 $ 1,221,713 $ 841,371
============== =============== =============== =============== =============
</TABLE>
<TABLE>
<CAPTION>
Putnam Putnam New
Voyager Opportunities Consolidated
Fund Fund Total Total
---- ---- ----- -----
<S> <C> <C> <C> <C>
Additions
- ---------
Contributions
Employer $ 30,873 $ 56,378 $ 200,148 $ 239,804
Employee 46,038 85,603 264,472 357,515
Loan repayments 3,250 7,506 - -
------------- ------------- ------------- -------------
80,161 149,487 464,620 597,319
Investment income
Interest 35,157 10,033 347,346 419,612
------------- ------------- ------------- -------------
35,157 10,033 347,346 419,612
Net appreciation (depreciation)
in fair value of investments (15,992) (19,542) 257,972 425,218
------------- ------------- ------------- -------------
Total additions 99,326 139,978 1,069,938 1,442,149
Disbursements
Payments to participants - - (585,325) (590,325)
Loans to participants (14,116) (35,819) - -
Fees (21) (94) (255) (255)
------------- ------------- ------------- -------------
Total disbursements (14,137) (35,913) (585,580) (590,580)
Transfers
Transfers from ESOP - - 26,479 26,479
Transfers (to) from SARP-M 473,250 1,082,404 (55,402) (150,131)
Transfers from previous trustee - - 6,118,509 -
Transfers between funds 18,905 19,240 - -
------------- ------------- ------------- -------------
Net transfers 492,155 1,101,644 6,089,586 (123,652)
------------- ------------- ------------- -------------
Net increase (decrease) 577,344 1,205,709 6,573,944 727,917
Net assets, beginning of period - - - 5,846,027
------------- ------------- ------------- -------------
Net assets, end of year $ 577,344 $ 1,205,709 $ 6,573,944 $ 6,573,944
============= ============= ============= =============
</TABLE>
12
<PAGE>
Notes to Financial Statements (continued)
-----------------------------------------
6. Allocation of Statements of Net Assets Available for Plan Benefits and
----------------------------------------------------------------------
Statements of Income and Changes in Net Assets Available for Plan Benefits
--------------------------------------------------------------------------
(continued)
-----------
STATEMENT OF INCOME AND CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS FOR
- -----------------------------------------------------------------------------
THE YEAR ENDED DECEMBER 31, 1995, WITH FUND INFORMATION
- -------------------------------------------------------
<TABLE>
<CAPTION>
Plan Money Market Diversified
Loans Fund Fund
----- ---- ----
Additions
---------
<S> <C> <C> <C>
Contributions
Employer $ - $ 8,915 $ 105,720
Employee - 8,505 119,517
Loan repayments (23,752) - 7,184
-------------- --------------- ---------------
(23,752) 17,420 232,421
Investment income
Interest - 8,230 15,211
Dividends - - 7,202
-------------- --------------- ---------------
- 8,230 22,413
Net appreciation
in fair value of investments - - 386,160
-------------- --------------- ---------------
Total additions (23,752) 25,650 640,994
Disbursements
Payments to participants - (33,741) (142,189)
Loans to participants 29,344 (946) (18,245)
Forfeitures - (580) -
Fees - (17) (1,370)
-------------- --------------- ---------------
Total disbursements 29,344 (35,284) (161,804)
Transfers
Transfers (to) from ESOP - 1,575 -
Transfers from SARP-M (4,478) - (11,234)
Transfers between funds - - 18,608
-------------- --------------- ---------------
Net transfers (4,478) 1,575 7,374
-------------- --------------- ---------------
Net increase (decrease) 1,114 (8,059) 486,564
Net assets, beginning of year 69,241 148,805 1,470,665
-------------- --------------- ---------------
Net assets, end of year $ 70,355 $ 140,746 $ 1,957,229
============== =============== ===============
<CAPTION>
Guaranteed
Company Interest
Stock Fund Fund Total
---------- ---- -----
Additions
---------
<S> <C> <C> <C>
Contributions
Employer $ 13,713 $ 60,687 $ 189,035
Employee 28,889 138,151 295,062
Loan repayments 5,873 10,695 -
-------------- -------------- --------------
48,475 209,533 484,097
Investment income
Interest 1,451 205,261 230,153
Dividends - - 7,202
-------------- -------------- --------------
1,451 205,261 237,355
Net appreciation
in fair value of investments 127,915 - 514,075
-------------- -------------- --------------
Total additions 177,841 414,794 1,235,527
Disbursements
Payments to participants (41,176) (527,736) (744,842)
Loans to participants - (10,153) -
Forfeitures - - (580)
Fees (3) (1,565) (2,955)
-------------- -------------- --------------
Total disbursements (41,179) (539,454) (748,377)
Transfers
Transfers (to) from ESOP (258) 5,170 6,487
Transfers from SARP-M (1,383) (29,168) (46,263)
Transfers between funds (9,481) (9,127) -
-------------- -------------- --------------
Net transfers (11,122) (33,125) (39,776)
-------------- -------------- --------------
Net increase (decrease) 125,540 (157,785) 447,374
Net assets, beginning of year 263,112 3,446,830 5,398,653
-------------- -------------- --------------
Net assets, end of year $ 388,652 $ 3,289,045 $ 5,846,027
============== ============== ==============
</TABLE>
13
<PAGE>
Notes to Financial Statements (continued)
7. Transactions with Parties-In-Interest
During the years ended December 31, 1996 and 1995, the Plan entered into the
following transactions with parties-in-interest:
<TABLE>
<CAPTION>
December 31,
1996 ----------- 1995
---- ----
Units/Shares Amount Units/Shares Amount
------------ ------ ------------ ------
The George Putnam Fund of Boston
- --------------------------------
<S> <C> <C> <C> <C>
Purchase of face amount 164,237.61 $ 2,624,620 -- $ --
Sales of face amount 90,892.87 1,454,983 -- --
Investment income/loss -- 8,430 -- --
Putnam Fund for Growth and Income
- ---------------------------------
Purchase of face amount 48,324.93 $ 840,325 -- $ --
Sales of face amount 3,660.38 64,454 -- --
Investment income/loss -- 1,097 -- --
Putnam Voyager Fund
- -------------------
Purchase of face amount 37,829.72 $ 627,865 -- $ --
Sales of face amount 3,929.56 65,402 -- --
Investment income/loss -- 487 -- --
Putnam Stable Value Fund
- ------------------------
Purchase of face amount 1,780,773.00 $ 1,780,823 -- $ --
Sales of face amount 1,150,826.00 1,150,876 -- --
Investment income/loss -- -- -- --
Putnam New Opportunities Fund
- -----------------------------
Purchase of face amount 30,736.02 $ 1,269,163 -- $ --
Sales of face amount 2,448.30 100,290 -- --
Investment income/loss -- (563) -- --
</TABLE>
14
<PAGE>
Notes to Financial Statements (continued)
7. Transactions with Parties-In-Interest
During the years ended December 31, 1996 and 1995, the Plan entered into the
following transactions with parties-in-interest:
<TABLE>
<CAPTION>
December 31,
1996 ----------- 1995
---- ----
Units/Shares Amount Units/Shares Amount
------------ ------ ------------ ------
Fleet National Bank Cash Management
- -----------------------------------
<S> <C> <C> <C> <C>
Purchases of face amount 4,936,151.00 $ 4,936,151 -- $ 1,539,816
Sales of face amount 5,133,532.00 5,133,532 -- 1,577,038
Investment income/loss -- -- -- 3,991
Fleet Financial Group, Inc.
- ---------------------------
Purchases of face amount 429.00 $ 18,622 -- $ --
Sales of face amount 429.00 17,517 -- --
Investment income/loss -- (1,105) -- --
Brown & Sharpe Manufacturing Company
- ------------------------------------
Purchases of capital stock 19,781.12 $ 159,790 661 $ 4,517
Distributions of capital stock to participants 2,242.61 31,277 593 5,645
Sales of capital stock, at market value 22,934.77 279,472 -- --
Investment income/loss -- 87,024 -- --
</TABLE>
15
<PAGE>
BROWN & SHARPE SAVINGS & RETIREMENT PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS
For the Year Ended December 31, 1996
------------------------------------
Category (i) An individual transaction in excess of 5% of plan assets
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
Identity of Party Involved Description of Assets Purchase Price Selling Price Cost of Asset
- -------------------------- --------------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
Putnam Fiduciary Trust Company The George Putnam Fund of Boston
Purchased $2,188,639 face amount $ 2,188,639 $ - $ 2,188,639
Sold $1,232,123 face amount - 1,232,123 1,237,516
Putnam Fund for Growth and Income
Purchased $616,566 face amount 616,566 - 616,566
Putnam Voyager Fund
Purchased $478,051 face amount 478,051 - 478,051
Putnam Stable Value Fund
Sold $1,115,211 face amount - 1,115,211 1,115,211
Putnam New Opportunities Fund
Purchased $1,001,998 face amount 1,001,998 - 1,001,998
Fleet National Bank Fleet National Bank Cash Management
Sold $2,109,359 face amount - 2,109,359 2,109,359
Purchased $1,404,786 face amount 1,404,786 - 1,404,786
Purchased $640,972 face amount 640,972 - 640,972
Sold $657,549 face amount - 657,549 657,549
Purchased $502,417 face amount 502,417 - 502,417
Purchased $334,467 face amount 334,467 - 334,467
Sold $334,466 face amount - 334,466 334,466
Purchased $334,467 face amount 334,467 - 334,467
Sold $334,466 face amount - 334,466 334,466
<CAPTION>
Current Value of
Identity of Party Involved Description of Assets Asset on Transaction Net Gain
- -------------------------- --------------------- -------------------- --------
Date (Loss)
---- ------
<S> <C> <C> <C>
Putnam Fiduciary Trust Company The George Putnam Fund of Boston
Purchased $2,188,639 face amount $ 2,188,639 $ -
Sold $1,232,123 face amount 1,232,123 (5,393)
Putnam Fund for Growth and Income
Purchased $616,566 face amount 616,566 -
Putnam Voyager Fund
Purchased $478,051 face amount 478,051 -
Putnam Stable Value Fund
Sold $1,115,211 face amount 1,115,211 -
Putnam New Opportunities Fund
Purchased $1,001,998 face amount 1,001,998 -
Fleet National Bank Fleet National Bank Cash Management
Sold $2,109,359 face amount 2,109,359 -
Purchased $1,404,786 face amount 1,404,786 -
Purchased $640,972 face amount 640,972 -
Sold $657,549 face amount 657,549 -
Purchased $502,417 face amount 502,417 -
Purchased $334,467 face amount 334,467 -
Sold $334,466 face amount 334,466 -
Purchased $334,467 face amount 334,467 -
Sold $334,466 face amount 334,466 -
</TABLE>
16
<PAGE>
BROWN & SHARPE SAVINGS & RETIREMENT PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS (continued)
For the Year Ended December 31, 1996
------------------------------------
Category (i) An individual transaction in excess of 5% of plan assets
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
Identity of Party Involved Description of Assets Purchase Price Selling Price Cost of Asset
- -------------------------- --------------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
Fleet National Bank Purchased $442,106 face amount $ 442,106 $ - $ 442,106
Sold $628,361 face amount - 628,361 628,361
Purchased $334,467 face amount 334,467 - 334,467
Sold $334,466 face amount - 334,466 334,466
Allstate Life Insurance Company Sold $334,466 face amount - 334,466 334,466
Principal Mutual Life Ins. Co. GIC (3)88705-03-H
Sold $688,258 face amount - 688,258 688,258
<CAPTION>
Current Value of
Identity of Party Involved Description of Assets Asset on Transaction Net Gain
- -------------------------- --------------------- -------------------- --------
Date (Loss)
---- ------
<S> <C> <C> <C>
Fleet National Bank Purchased $442,106 face amount $ 442,106 -
Sold $628,361 face amount 628,361 -
Purchased $334,467 face amount 334,467 -
Sold $334,466 face amount 334,466 -
Allstate Life Insurance Company Sold $334,466 face amount 334,466 -
Principal Mutual Life Ins. Co. GIC (3)88705-03-H
Sold $688,258 face amount 688,258 -
</TABLE>
17
<PAGE>
BROWN & SHARPE SAVINGS & RETIREMENT PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS
For the Year Ended December 31, 1996
------------------------------------
Category (iii) A series of securities transactions in excess of 5% of plan
- --------------------------------------------------------------------------
assets
- ------
<TABLE>
<CAPTION>
Identity of Party Involved Description of Assets Purchase Price Selling Price Cost of Asset
- -------------------------- --------------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
Putnam Fiduciary Trust Company The George Putnam Fund of Boston
Purchased $2,624,620 face amount in
72 transactions $ 2,624,620 $ - $ 2,624,620
Sold $1,454,983 face amount in 37
transactions - 1,454,983 1,446,553
Putnam Fund for Growth and Income
Purchased $840,325 face amount in 75
transactions 840,325 - 840,325
Sold $64,454 face amount in 26
transactions - 64,454 63,357
Putnam Voyager Fund
Purchased $627,865 face amount in
73 transactions 627,865 - 627,865
Sold $65,402 face amount in 23
transactions - 65,402 64,915
Putnam Stable Value Fund
Purchased $1,780,823 face amount in 108
transactions 1,780,823 - 1,780,823
Sold $1,150,876 face amount in 32
transactions - 1,150,876 1,150,876
Putnam New Opportunities Fund
Purchased $1,269,163 face amount in
78 transactions 1,269,163 - 1,269,163
Sold $100,290 face amount in 23
transactions - 100,290 100,853
<CAPTION>
Current Value of
Identity of Party Involved Description of Assets Asset on Transaction Net Gain
- -------------------------- --------------------- -------------------- --------
Date (Loss)
---- ------
<S> <C> <C> <C>
Putnam Fiduciary Trust Company The George Putnam Fund of Boston
Purchased $2,624,620 face amount in
72 transactions $ 2,624,620 $ -
Sold $1,454,983 face amount in 37
transactions 1,454,983 8,430
Putnam Fund for Growth and Income
Purchased $840,325 face amount in 75
transactions 840,325 -
Sold $64,454 face amount in 26
transactions 64,454 1,097
Putnam Voyager Fund
Purchased $627,865 face amount in
73 transactions 627,865 -
Sold $65,402 face amount in 23
transactions 65,402 487
Putnam Stable Value Fund
Purchased $1,780,823 face amount in 108
transactions 1,780,823 -
Sold $1,150,876 face amount in 32
transactions 1,150,876 -
Putnam New Opportunities Fund
Purchased $1,269,163 face amount in
78 transactions 1,269,163 -
Sold $100,290 face amount in 23
transactions 100,290 (563)
</TABLE>
18
<PAGE>
BROWN & SHARPE SAVINGS & RETIREMENT PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS (continued)
For the Year Ended December 31, 1996
------------------------------------
Category (iii) A series of securities transactions in excess of 5% of plan
- --------------------------------------------------------------------------
assets
- ------
<TABLE>
<CAPTION>
Identity of Party Involved Description of Assets Purchase Price Selling Price Cost of Asset
- -------------------------- --------------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
Brown & Sharpe Manufacturing The Brown & Sharpe Stock Fund
Company Purchased $159,790 face amount in
60 transactions $ 159,790 $ - $ 159,790
Sold $310,749 face amount in 12
transactions - 310,749 223,725
Fleet National Bank Fleet National Bank Cash Management
Purchased $4,936,151 face amount in
117 transactions 4,936,151 - 4,936,151
Sold $5,133,532 face amount in 65
transactions - 5,133,532 5,133,532
Allstate Life Insurance Company Allstate Life Insurance
Purchased $9,439 face amount in 4
transactions 9,439 - 9,439
Sold $356,790 face amount in 4
transactions - 356,790 356,790
Principal Mutual Life Insurance Principal Mutual Insurance GIC
Company Contract No. (3) 88705-H
Purchased $10,852 face amount in 1
transaction 10,852 - 10,852
Sold $1,300,980 face amount in 12
transactions - 1,300,980 1,300,980
<CAPTION>
Current Value of
----------------
Identity of Party Involved Description of Assets Asset on Transaction Net Gain
- -------------------------- --------------------- -------------------- --------
Date (Loss)
---- -----
<S> <C> <C> <C>
Brown & Sharpe Manufacturing The Brown & Sharpe Stock Fund
Company Purchased $159,790 face amount in
60 transactions $ 159,790 $ -
Sold $310,749 face amount in 12
transactions 310,749 87,024
Fleet National Bank Fleet National Bank Cash Management
Purchased $4,936,151 face amount in
117 transactions 4,936,151 -
Sold $5,133,532 face amount in 65
transactions 5,133,532 -
Allstate Life Insurance Company Allstate Life Insurance
Purchased $9,439 face amount in 4
transactions 9,439 -
Sold $356,790 face amount in 4
transactions 356,790 -
Principal Mutual Life Insurance Principal Mutual Insurance GIC
Company Contract No. (3) 88705-H
Purchased $10,852 face amount in 1
transaction 10,852 -
Sold $1,300,980 face amount in 12
transactions 1,300,980 -
</TABLE>
19
<PAGE>
Brown & Sharpe Savings & Retirement Plan
Schedule of Assets Held for Investment Purposes
At December 31, 1996
<TABLE>
<CAPTION>
Cost of
Shares or Face Value Description Fair Value Investment
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
73,344.74 shares The George Putnam Fund of Boston
Balanced fund consisting of stocks and corporate $ 1,202,853 $ 1,178,067
and government bonds
28,287.72 shares Putnam New Opportunities Fund
Long-term growth funds consisting of stock of 1,149,331 1,168,310
certain emerging industry groups that in Putnam
Investments view offer long-term growth potential
33,900.16 shares Putnam Voyager Fund
A combination of stocks of small companies expected 546,471 562,950
to grow over time in addition to stocks of larger more
established corporations
31,035.57 shares Brown & Sharpe Company Stock Fund
Consisting of 31,035.57 shares of Brown & Sharpe 434,498 283,136
Class A & B Common Stock
44,664.55 shares The Putnam Fund for Growth & Income
A combination of attractive priced stocks of companies 804,855 776,968
viewed by Putnam to offer long-term growth potential
while also providing income
Brown & Sharpe Stable Value Fund
$647,245 face value American International Life Assurance Company 647,245 647,245
$42,030 face value Principal Mutual Life Insurance Company (3)88705-02-H 42,030 42,030
$754,939 face value Principal Mutual Life Insurance Company (3)88705-03-H 754,939 754,939
629,947 shares Putnam Stable Value Fund 629,947 629,947
------------- ------------
TOTAL INVESTMENTS 6,212,169 6,043,592
Plan Loan Receivable 164,879 164,879
------------- ------------
TOTAL ASSETS HELD FOR INVESTMENTS $ 6,377,048 $ 6,208,471
============= ============
</TABLE>
20
<PAGE>
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statements
(Form S-8 Nos. 2-33676, 2-56821, 2-60398, 2-77219, 2-77575, 2-83637, 2-97935,
33-17831, 33-23601, 33-23603, 33-30927, and 33-54496) of Brown & Sharpe
Manufacturing Company of our report dated June 23,1997, with respect to the
financial statements and schedules of the Brown & Sharpe Savings and Retirement
Plan included in this Annual Report (Form 11-K) for the year ended December 31,
1996.
ERNST & YOUNG LLP
Providence, Rhode Island
June 23, 1997
21
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