<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 FOR MANAGEMENT EMPLOYEES
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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)
<PAGE>
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 FOR MANAGEMENT EMPLOYEES
By: /s/ Alfred J. Corso
-------------------
Alfred J. Corso
Controller
(Principal Accounting Officer)
2
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BROWN & SHARPE SAVINGS AND RETIREMENT PLAN FOR MANAGEMENT EMPLOYEES
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
Purposes at End of Year 10-11
Consent of Independent Auditors 12
</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
benefits of the Brown & Sharpe Savings and Retirement Plan for Management
Employees 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 FOR MANAGEMENT EMPLOYEES
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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:
Investments (Notes 2 and 5) $49,404,326 $38,662,433
Employer contribution receivable 1,332,960 1,247,835
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Net Assets Available for Benefits $50,737,286 $39,910,268
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STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
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<TABLE>
<CAPTION>
For the years ended December 31,
--------------------------------
1999 1998
---- ----
<S> <C> <C>
Additions
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Contributions
Employer $ 1,715,489 $ 1,866,590
Employee 2,322,694 2,294,964
----------- -----------
4,038,183 4,161,554
Investment income
Interest and dividends 4,002,540 2,356,187
Net appreciation
in fair value of investments 6,300,716 2,506,184
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Total additions 14,341,439 9,023,925
Deductions
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Payments to participants (3,661,533) (1,044,489)
Fees (1,903) (1,702)
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Total deductions (3,663,436) (1,046,191)
Transfers
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From Brown & Sharpe Employee Stock Owner-
ship and Profit Participation Plan (ESOP) 6,081 28,923
From Brown & Sharpe Savings
and Retirement Plan (SARP) 142,934 348,636
----------- -----------
Net transfers 149,015 377,559
----------- -----------
Net increase 10,827,018 8,355,293
Net assets, beginning of year 39,910,268 31,554,975
----------- -----------
Net assets, end of year $50,737,286 $39,910,268
=========== ===========
</TABLE>
See notes to the financial statements.
5
<PAGE>
THE BROWN & SHARPE SAVINGS AND RETIREMENT PLAN FOR MANAGEMENT EMPLOYEES
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
for Management Employees (the "Plan") provides only general information.
Participants should refer to the Summary Plan Description for more complete
details.
General
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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.
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 1998,
(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," 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 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 1999 and 1998 were $1,332,960 and
$1,247,835, 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 $24,705 and $20,590, 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 $357,824 and $598,165, 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
<PAGE>
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
<PAGE>
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
---- ----
Putnam Stable Value Fund $ 6,178,386 $ 4,925,712
The George Putnam Fund of Boston 5,123,075 5,681,762
The Putnam Fund for Growth & Income 7,136,946 7,300,299
Putnam Voyager Fund 11,557,500 7,436,449
Putnam New Opportunities Fund 16,622,992 10,347,530
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 $6,300,716 and $2,506,184 as
follows:
1999 1998
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Mutual Funds $ 7,812,858 $2,802,329
Common Stock (1,512,142) (296,145)
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$ 6,300,716 $2,506,184
=========== ==========
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
-------------------------------------
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
------ ------ ------ ------
Brown & Sharpe Manufacturing Company
------------------------------------
<S> <C> <C> <C> <C>
Purchases of capital stock 165,815.87 $796,267 233,123.44 $2,244,555
Distributions of capital stock to participants 9,479.00 48,535 49,364.55 42,419
Sales of capital stock, at market value 12,857.84 51,958 151,568.59 1,995,553
Investment income/loss -- (90,729) -- 44,180
Stock held, at fair value 334,331.86 710,455 190,852.83 1,526,823
</TABLE>
9
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SUPPLEMENTAL SCHEDULE
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<PAGE>
Brown & Sharpe Savings and Retirement Plan for Management Employees
EIN No. 05-0113140 Plan No. 002
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 *
314,685.202 shares Balanced fund consisting of stocks and corporate $ 5,123,075
and government bonds
Putnam New Opportunities Fund *
182,750.574 shares Long-term growth funds consisting of stock of 16,622,992
certain emerging industry groups that in Putnam
Investments' view offer long-term growth potential
Putnam Voyager Fund *
373,304.259 shares A combination of stocks of small companies expected 11,557,500
to grow over time in addition to stocks of larger more
established corporations
Brown & Sharpe Company Stock Fund *
334,331.862 shares Consisting of 334,331.862 shares of Brown & Sharpe 710,455
Class A & B Common Stock
The Putnam Fund for Growth & Income *
380,637.144 shares A combination of attractive priced stocks of companies 7,136,946
viewed by Putnam to offer long-term growth potential
while also providing income
Brown & Sharpe Stable Value Fund
6,178,386 shares Putnam Stable Value Fund * 6,178,386
---------------
SUB TOTAL ASSETS HELD FOR INVESTMENTS 47,329,354
---------------
* Identifies party-in-interest to the Plan
</TABLE>
10
<PAGE>
Brown & Sharpe Savings and Retirement Plan for Management Employees
EIN No. 05-0113140 Plan No. 002
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 *
16,774.101 shares Seeks income consistent with preservation $ 180,657
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 *
3,173.118 shares Invests in equities and fixed income securities. 48,231
The fund is weighted more toward equity investments
that traditionally return more than fixed income
securities.
Putnam Asset Allocation - Balanced Portfolio *
8,078.772 shares Invests in equities and fixed income securities. 104,701
The fund takes a balanced approach between equities
and fixed income investments regarding investment
philosophy.
Putnam Asset Allocation - Conservative Portfolio *
9,525.803 shares Invests in equity and fixed income securities 100,402
weighted more towards the fixed income securities
Putnam International Growth Fund *
30,856.828 shares Invests in companies located outside of the United 915,831
States
*Plan Loans Receivable 7% to 10.25% 725,150
-----------
TOTAL ASSETS HELD FOR INVESTMENTS $49,404,326
===========
* Identifies party-in-interest to the Plan
</TABLE>
11
<PAGE>
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statements
(Form S-8 Nos. 2-77575, and 33-23603) pertaining to the Brown & Sharpe Savings
and Retirement Plan for Management Employees 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 for
Management Employees 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
