<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, 1999
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Commission File Number 1-5881
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THE BROWN & SHARPE SAVINGS AND RETIREMENT PLAN
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(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)
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SIGNATURES
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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
19th day of June 2000.
BROWN & SHARPE SAVINGS AND RETIREMENT PLAN
By: /s/ Alfred J. Corso
-----------------------------
Alfred J. Corso
Controller
(Principal Accounting Officer)
2
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THE BROWN & SHARPE SAVINGS AND RETIREMENT PLAN
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Table of Contents
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<TABLE>
<CAPTION>
Page
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<S> <C>
Report of Ernst & Young LLP, Independent Auditors 4
Audited Financial Statements:
Statements of Net Assets Available for Benefits
at December 31, 1999 and 1998 5
Statements of Changes in Net Assets Available for
Benefits for the Years Ended December 31, 1999 and 1998 5
Notes to Financial Statements 6-9
Supplemental Schedule:
Schedule H, Line 4i, Schedule of Assets Held for Investment 10-11
Purposes at End of Year
Consent of Independent Auditors 12
</TABLE>
3
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REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
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Brown & Sharpe Savings and Retirement Plan Committee
Brown & Sharpe Manufacturing Company
We have audited the accompanying statements of net assets available for
benefits of the Brown & Sharpe Savings and Retirement Plan as of December 31,
1999 and 1998, and the related statements of changes in net assets available for
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 auditing standards generally
accepted in the United States. 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, 1999 and 1998, and the changes in its net assets available for
benefits for the years then ended, in conformity with accounting principles
generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying supplemental schedule of
assets held for investment purposes at end of year, as of December 31, 1999, is
presented for purposes of additional analysis and is not a required part of the
financial statements but is supplementary information required by the Department
of Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental schedule is the
responsibility of the Plan's management. The supplemental schedule has been
subjected to the auditing procedures applied in our audits of the financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
ERNST & YOUNG LLP
Providence, Rhode Island
May 25, 2000
4
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THE BROWN & SHARPE SAVINGS AND RETIREMENT PLAN
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STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
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December 31,
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1999 1998
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Assets
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Investments (Notes 2 and 5) $10,081,160 $8,058,764
Employer contribution receivable 214,698 216,545
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Net Assets Available for Benefits $10,295,858 $8,275,309
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STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
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For the years ended December 31,
--------------------------------
1999 1998
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Additions
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Contributions
Employer $ 273,438 $ 345,992
Employee 397,849 410,955
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671,287 756,947
Investment income
Interest and dividends 800,679 509,397
Net appreciation
in fair value of investments 1,207,180 480,958
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Total additions 2,679,146 1,747,302
Deductions
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Payments to participants (515,498) (944,710)
Fees (1,053) (1,137)
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Total deductions (516,551) (945,847)
Transfers
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From Brown & Sharpe Employee Stock Owner-
ship and Profit Participation Plan (ESOP) 888 13,129
To Brown & Sharpe Savings and Retirement
Plan for Management Employees (SARP-M) (142,934) (348,636)
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Net transfers (142,046) (335,507)
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Net increase 2,020,549 465,948
Net assets, beginning of year 8,275,309 7,809,361
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Net assets, end of year $10,295,858 $8,275,309
=========== ==========
See notes to the financial statements.
5
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THE BROWN & SHARPE SAVINGS AND RETIREMENT PLAN
Notes To Financial Statements
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Years Ended December 31, 1999 and 1998
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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. Six
consecutive months 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.
Contributions
-------------
The Plan permits a participant to make deferred salary contributions to the
Plan up to 16% of compensation up to a maximum of $10,000 in 1999 and $10,000
in 1998, 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," in multiples of 10%.
The Company may, at the discretion of the Board of Directors, make a
supplemental contribution of 4% of annual compensation plus 8% 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 1999 and 1998 were $214,698 and $216,545, 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 1999 and
1998 were $2,107 and $2,593, 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 contributions
for 1999 and 1998 were $56,633 and $126,854, respectively.
Participant Accounts
--------------------
A separate account is established for each participant when enrolled in the
Plan. Each participant's account is credited with (a) participant salary
deferrals, (b) Company contributions and (c) Plan earnings. Guaranteed
contract account earnings are valued on a monthly basis and are allocated to
participants based on a pro rated basis.
6
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Notes to Financial Statements (continued)
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Years Ended December 31, 1999 and 1998
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Investments
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The Plan assets are held in a trust administered by Putnam Fiduciary Trust
Company as Trustee.
Transfers between investment funds can be made subject to certain rules.
The Company pays substantially all of the expenses associated with
administering this Plan.
Benefits
--------
A participant is always vested 100% in deferred salary contributions. Company
stock purchased at a discount becomes 100% vested in Company contributions
after 3 years of service. On January 1, 1998, the Company changed the vesting
schedule to 5 years graduated 20 percent vesting per year. If the
participant's service date was before January 1, 1998 and he/she was not
vested then the vesting schedule is a three year schedule at 20 percent for
the first two years and 100% in the third year.
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.
Participants may borrow from their fund accounts a minimum of $1,000 and to a
maximum equal to the lesser of $50,000 or 50 percent of their vested account
balance. Loan terms range from one to five years or up to fifteen years for
the purchase of a primary residence. The loans are secured by the balance in
the participant's account and bear interest at a rate commensurate with local
prevailing rates as determined by the Plan administrator. Principal and
interest are paid ratably through payroll deductions.
2. Summary of Significant Accounting Policies
------------------------------------------
The preparation of financial statements in accordance with accounting
principles generally accepted in the United States requires the use of
management's estimates. Actual amounts could differ from these estimates.
The Plan has adopted SOP 99-3, "Accounting for and Reporting of Certain
Defined Contribution Benefit Plan Investments and Other Disclosure Matters,"
for the 1999 financial statement presentation. Accordingly, the fund by fund
information under the previously disclosed footnote "Allocation of Statement
of Net Assets Available for Benefits and Statement of Changes in Net Assets
Available for Benefits" has been eliminated.
Investments, other than the Stable Value Fund, 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.
Investment in the Putnam Stable Value Fund is 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 their
outstanding balances which approximate 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.
7
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Notes to Financial Statements (continued)
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Years Ended December 31, 1999 and 1998
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3. Tax Status
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The Internal Revenue Service has determined and informed the Company by a
letter dated 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.
5. Investments
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Investments held greater than five percent of the Plan's net assets
available for benefits at December 31, 1999 and 1998 are as follows:
1999 1998
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Putnam Stable Value Fund $1,414,078 $1,851,526
The George Putnam Fund of Boston 1,251,743 1,401,211
The Putnam Fund for Growth & Income 1,281,336 1,210,517
Putnam Voyager Fund 1,690,577 954,911
Putnam New Opportunities Fund 3,299,089 1,972,225
During the years ended December 31, 1999 and 1998, the Plan's investments
(including gains and losses on investments bought and sold, as well as held
during the year) appreciated in value by $1,207,180 and $480,958 as follows:
1999 1998
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Mutual Funds $1,454,923 $509,142
Common Stock (247,743) (28,184)
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$1,207,180 $480,958
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8
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Notes to Financial Statements (continued)
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Years Ended December 31, 1999 and 1998
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6. Transactions with Parties-In-Interest
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The Plan invests in mutual funds managed by Putnam Investments, who is also
the Plan's recordkeeper and trustee. Therefore, these transactions qualify
as party-in-interest.
The following summarizes activity related to Brown & Sharpe capital stock
during the years ended December 31, 1999 and 1998:
<TABLE>
<CAPTION>
1999 1998
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Shares Amount Shares Amount
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<S> <C> <C> <C> <C>
Brown & Sharpe Manufacturing Company
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Purchases of capital stock 89,000.80 $341,940 19,937.99 $189,283
Distributions of capital stock to participants - - 2,232.71 23,961
Sales of capital stock, at market value 1,892.03 9,423 28,567.08 285,149
Investment income/loss - (7,757) - 3,911
Stock held, at fair value 104,186.46 221,396 17,077.69 136,622
</TABLE>
9
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SUPPLEMENTAL SCHEDULE
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<PAGE>
Brown & Sharpe Savings and Retirement Plan
EIN No: 05-0113140 Plan No: 009
Schedule H, Line 4i - Schedule of Assets Held for Investment Purposes
at End of Year as of December 31, 1999
<TABLE>
<CAPTION>
Shares or Face Value Description Current Value
====================================================================================================
<S> <C> <C>
The George Putnam Fund of Boston *
76,888.405 shares Balanced fund consisting of stocks and corporate $ 1,251,743
and government bonds
Putnam New Opportunities Fund *
36,269.673 shares Long-term growth funds consisting of stock of 3,299,089
certain emerging industry groups that in Putnam
Investments' view offer long-term growth potential
Putnam Voyager Fund *
54,605.199 shares A combination of stocks of small companies expected 1,690,577
to grow over time in addition to stocks of larger
more established corporations
Brown & Sharpe Company Stock Fund *
104,186.459 shares Consisting of 104,186.459 shares of Brown & Sharpe 221,396
Class A & B Common Stock
The Putnam Fund for Growth & Income *
68,337.928 shares A combination of attractive priced stocks of
companies viewed by Putnam to offer long-term 1,281,336
growth potential while also providing income
Brown & Sharpe Stable Value Fund
1,414,078 shares Putnam Stable Value Fund * 1,414,078
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SUB TOTAL ASSETS HELD FOR INVESTMENTS 9,158,219
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</TABLE>
* Identifies party-in-interest to the Plan
10
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Brown & Sharpe Savings and Retirement Plan
EIN No: 05-0113140 Plan No: 009
Schedule H, Line 4i - Schedule of Assets Held for Investment Purposes
at End of Year as of December 31, 1999
<TABLE>
<CAPTION>
Shares or Face Value Description Current Value
===========================================================================================================
<S> <C> <C>
Putnam Diversified Income Trust *
1,458.199 shares Seeks income consistent with preservation $ 15,705
of capital. The fund invests in fixed income
securities such as U.S. Government obligations,
lower rated U.S. corporate debt and debt
obligations of foreign governments.
Putnam Asset Allocation - Growth Portfolio *
1,819.214 shares Invests in equities and fixed income securities. 27,652
The fund is weighted more toward equity investments
that traditionally return more than fixed income
securities.
Putnam Asset Allocation - Balanced Portfolio *
2,470.658 shares Invests in equities and fixed income securities. 32,020
The fund takes a balanced approach between equities
and fixed income investments regarding investment
philosophy.
Putnam Asset Allocation - Conservative Portfolio *
5,001.882 shares Invests in equity and fixed income weighted 52,720
more towards the fixed income securities
Putnam International Growth Fund *
13,774.122 shares Invests in companies located outside of the United 408,816
States
*Plan Loans Receivable 7%-10.25% 386,028
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TOTAL ASSETS HELD FOR INVESTMENTS $10,081,160
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</TABLE>
*Identifies party-in-interest to the Plan
11
<PAGE>
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statements
(Form S-8 Nos. 33-17831 and 33-23601) pertaining to the Brown & Sharpe Savings
and Retirement Plan of Brown & Sharpe Manufacturing Company of our report dated
May 25, 2000, with respect to the financial statements and schedule of the Brown
& Sharpe Savings and Retirement Plan included in this Annual Report (Form 11-K)
for the year ended December 31, 1999.
ERNST & YOUNG LLP
Providence, Rhode Island
June 19, 2000
12
