Document:

Exhibit 10.25 to Form 10-K\A for NN, Inc.

Exhibit 10.25

                 CHANGE OF CONTROL AND NONCOMPETITION AGREEMENT

         THIS AGREEMENT ("Agreement") is made and entered into this 21st day of
January, 2002, by and between DAVID L. DYCKMAN ("Employee") and NN, INC., a
Delaware corporation, including its wholly-owned subsidiaries and affiliated
companies (collectively, "Employer").

                                    RECITALS

         WHEREAS, the Board of Directors of Employer (the "Board") has
determined that it is in the best interests of Employer to reinforce and
encourage the continuity of management personnel in anticipation of a possible
or potential Change of Control (as defined below); and

         WHEREAS, the Board believes this objective can best be served by
providing for a compensation arrangement for Employee upon Employee's
termination of employment under certain circumstances in the event of a Change
of Control.

         NOW, THEREFORE, in consideration of the mutual promises and covenants
as hereinafter set forth, the parties agree as follows:

                                    AGREEMENT

     1. General. Employer is engaged in the (i) manufacture and supply of
precision steel balls and rollers to domestic and international anti-friction
bearing manufacturers, automotive original equipment manufacturers and the
automotive aftermarket, the gas and mining industries, producers of drilling
bits for oil, gas and water wells and producers of stainless steel valves and
pumps, (ii) full-service design and manufacture of plastic injection molded
components to the bearing, automotive, electronic, leisure and consumer markets,
and (iii) the manufacture and supply of rubber seals to domestic and
international anti-friction bearing manufacturers. Employee is employed by
Employer in a senior management position in which Employee has or will have
access to the Employer's confidential information and trade secrets.

     2. Employment Relationship. Except as specifically set forth herein, the
terms and conditions of Employee's employment are set forth in the Employment
Agreement dated January 21, 2002 between Employee and Employer (the "Employment
Agreement"), a copy of which is attached hereto as Exhibit A.

     3. Termination Upon Change of Control.

               (a) Severance Benefits. In the event that Employee's employment
          is terminated within two (2) years following a "Change of Control" (as
          defined below) and such termination is either (i) Without Cause (as
          defined below), or (ii) is a Constructive Termination (as defined
          below), Employee shall receive, in addition to all compensation due
          and payable to or accrued for the benefit of Employee as of the date
          of termination:

                    (i) a lump sum payment equal to an amount set forth on
               Schedule A to this Agreement ("Severance Payment"). The Severance
               Payment shall be made by wire transfer of immediately available
               funds to an account designated by Employee within seven (7)
               business days following the date of termination;

                    (ii) a payment equal to the annual bonus to which Employee
               would have been entitled but for Employee's termination of
               employment for the year of Employee's termination, pro-rated for
               the portion of the year during which he was employed by Employer
               ("Pro-rated Bonus"). The Pro-rated Bonus shall be payable to
               Employee at the end of the calendar year for which the bonus is
               payable, in accordance with Employer's normal bonus procedures;
               and

                    (iii) for a period of twenty-four months after such
               termination (the "Coverage Period"), medical, dental,
               prescription drug, life, accidental death and disability
               insurance coverage substantially similar to the coverage which
               Employee was receiving or entitled to receive immediately prior
               to the date of the termination of Employee's employment
               ("Insurance Benefits"). Notwithstanding the foregoing, Employee
               shall not be entitled to receive the Insurance Benefits (or a
               portion thereof) to the extent that Employee obtains other
               employment that provides equal or greater benefits during the
               Coverage Period.

The Severance Payment, Pro-rated Bonus and Insurance Benefits are collectively
referred to in this Agreement as the "Severance Benefit."

          (b) Excise Tax.

               (i) Notwithstanding anything to the contrary set forth in this
          Agreement, in no event shall a Severance Benefit payable pursuant to
          this Section 3 exceed an amount equal to the lesser of (i) 2.99 times
          the "base amount" (as defined in Section 280G(b)(3) of the Internal
          Revenue Code of 1986, as amended (the "Code")) of Employee's
          compensation, or (ii) such other amount which would constitute a
          "parachute payment" (as defined in Section 280G of the Code). In the
          event that it shall be determined that any Severance Benefit to
          Employee (whether paid or payable or distributed or distributable)
          would be subject to the excise tax imposed by Section 4999 of the
          Code, or any successor provision thereto (the "Excise Tax"), then
          Employee shall be entitled to receive from Employer an additional
          payment (the "Gross-Up Payment") in an amount such that the net amount
          of the Severance Benefit and the Gross-Up Payment retained by Employee
          after the calculation and deduction of all Excise Taxes (including any
          interest or penalties imposed with respect to such taxes) on the
          payment and all Federal, state and local income tax, employment tax
          and Excise Tax (including any interest or penalties imposed with
          respect to such taxes) or the Gross-Up Payment provided for in this
          Section, and taking into account any lost or reduced tax deductions on
          account of the Gross-Up Payment, shall be equal to the Severance
          Benefit.

                                       2

               (ii) Employee shall notify Employer in writing of any claim by
          the Internal Revenue Service that, if successful, would require the
          payment by Employer of the Gross-Up Payment. Such notification shall
          be given as soon as practicable after Employee is informed in writing
          of such claim and shall apprise Employer of the nature of such claim
          and the date on which such claim is requested to be paid. Employee
          shall not pay such claim prior to the expiration of the 30-day period
          following the date on which Employee gives such notice to Employer (or
          such shorter period ending on the date that any payment of taxes,
          interest and/or penalties with respect to such claim is due). If
          Employer notifies Employee in writing prior to the expiration of such
          period that it desires to contest such claim, Employee shall:

                         (A) give Employer any information reasonably requested
                    by Employer relating to such claim;

                         (B) take such action in connection with contesting such
                    claim as Employer shall reasonably request in writing from
                    time to time, including, without limitation, accepting legal
                    representation with respect to such claim by an attorney
                    reasonably selected by Employer;

                         (C) cooperate with Employer in good faith in order to
                    effectively contest such claim; and

                         (D) permit Employer to participate in any proceedings
                    relating to such claims;

         provided, however, that Employer shall bear and pay directly all costs
         and expenses (including additional interest and penalties) incurred in
         connection with such contest and shall indemnify Employee for and hold
         Employee harmless from, on an after-tax basis, any Excise Tax or income
         tax (including interest and penalties with respect thereto) imposed as
         a result of such representation and payment of all related costs and
         expenses. Without limiting the foregoing provisions of this section,
         Employer shall control all proceedings taken in connection with such
         contest and, at its sole option, may pursue or forgo any and all
         administrative appeals, proceedings, hearings and conferences with the
         taxing authority in respect of such claim and may, at its sole option,
         either direct Employee to pay the tax claimed and sue for a refund or
         contest the claim in any permissible manner, and Employee agrees to
         prosecute such contest to a determination before any administrative
         tribunal, in a court of initial jurisdiction and in one or more
         appellate courts, as Employer shall determine; provided, however, that
         if Employer directs Employee to pay such claim and sue for a refund,
         Employer shall advance the amount of such payment to Employee, on an
         interest-free basis, and shall indemnify Employee for and hold Employee
         harmless from, on an after-tax basis, any Excise Tax or income tax
         (including interest or penalties with respect thereto) imposed with
         respect to such advance or with respect to any imputed income with
         respect to such advance (including as a result of any forgiveness by
         Employer of such advance); provided, further, that any extension of the
         statute of limitations relating to the payment of taxes for the taxable
         year of Employee with respect to which such contested amount is claimed
         to

                                       3

         be due is limited solely to such contested amount. Furthermore,
         Employer's control of the contest shall be limited to issues with
         respect to which a Gross-Up Payment would be payable hereunder and
         Employee shall be entitled to settle or contest, as the case may be,
         any other issue raised by the Internal Revenue Service or any other
         taxing authority.

               (c)   Change of Control. "Change of Control" shall mean: (i) a
         person, corporation, entity or group (A) makes a tender or exchange
         offer for the issued and outstanding voting stock of Employer and
         beneficially owns thirty percent (30%) or more of the issued and
         outstanding voting stock of Employer after such tender or exchange
         offer, or (B) acquires, directly or indirectly, the beneficial
         ownership of thirty percent (30%) or more of the issued and outstanding
         voting stock of Employer in a single transaction or a series of
         transactions (other than any person, corporation, entity or group for
         which a Schedule 13G is on file with the Securities and Exchange
         Commission, so long as such person, corporation, entity or group has
         beneficial ownership of less than fifty percent (50%) of the issued and
         outstanding voting stock of Employer); (ii) Employer is a party to a
         merger, consolidation or similar transaction and following such
         transaction, fifty percent (50%) or more of the issued and outstanding
         voting stock of the resulting entity is not beneficially owned by those
         persons, corporations or entities that constituted the stockholders of
         Employer immediately prior to the transaction; (iii) Employer sells
         fifty percent (50%) or more of its assets to any other person or
         persons (other than an affiliate or affiliates of Employer); or (iv)
         individuals who, as of the date hereof, constitute the Board (the
         "Incumbent Board") cease for any reason to constitute at least
         seventy-five percent (75%) of the Board; provided, however, that any
         individual becoming a director subsequent to the date hereof, whose
         election or nomination was approved by a majority of the directors then
         comprising the Incumbent Board, shall be considered a member of the
         Incumbent Board, but not including any individual whose initial Board
         membership is a result of an actual or threatened election contest (as
         that term is used in Rule 14a-11 promulgated under the Securities Act
         of 1934, as amended) or an actual or threatened solicitation of proxies
         or consents by or on behalf of a party other than the Board.

               (d)   Termination Without Cause. Termination "Without Cause" shall
         mean termination of Employee by Employer for reasons other than: (i)
         the willful, persistent failure of Employee (after thirty (30) days
         written notice and a reasonable opportunity to cure) to perform his
         material duties for reasons other than death or disability; (ii) the
         breach by Employee of any material provision of this Agreement; or
         (iii) Employee's conviction of a felony involving dishonesty, deceit or
         moral turpitude by a trial court of competent jurisdiction, whether or
         not an appeal is taken.

               (e)   Constructive Termination. "Constructive Termination" shall
         mean: (i) a material, adverse change of Employee's responsibilities,
         authority, status, position, offices, titles, duties or reporting
         requirements (including directorships); (ii) an adverse change in
         Employee's annual compensation or benefits; (iii) a requirement to
         relocate in excess of fifty (50) miles from Employee's then current
         place of employment; or (iv) the breach by Employer of any material
         provision of this Agreement, other than a breach that is remedied by
         Employer within 10 days after receipt of notice thereof from Employee.
         For purposes of this definition, Employee's responsibilities,
         authority, status, position,

                                       4

          offices, titles, duties and reporting requirements are to be
          determined as of the date of this Agreement. For purposes of this
          Section, all determinations of Constructive Termination shall be made
          in good faith by Employee and shall be conclusive.

              (f)    Other Severance Benefits. The Severance Benefit payable to
          Employee pursuant to this Section 3 shall be reduced by any severance
          benefits to which Employee is entitled under Employer's severance
          policies for terminated employees generally or any termination
          payments payable to Employee under Employee's Employment Agreement.

     4. Employee's Acknowledgments and Covenants.

               (a) Confidential Materials and Information. Employer has
          developed confidential information, strategies and programs, which
          include customer lists, prospects, lists, expansion and acquisition
          plans, market research, sales systems, marketing programs, computer
          systems and programs, product development strategies, manufacturing
          strategies and techniques, budgets, pricing strategies, identity and
          requirements of national accounts, customer lists, methods of
          operating, service systems, training programs and methods, other trade
          secrets and other information about the business in which employer is
          engaged that is not known to the public and gives Employer an
          opportunity to obtain an advantage over competitors who do not know of
          such information (collectively, "Confidential Information"). In
          performing duties for Employer, Employee regularly will be exposed to
          and work with the Confidential Information. Employee acknowledges that
          such Confidential Information is critical to Employer's success and
          that Employer has invested substantial sums of money in developing the
          Confidential Information. While Employee is employed by Employer and
          after such employment ends for any reason, Employee will never
          reproduce, publish, disclose, use, reveal, show or otherwise
          communicate to any person or entity any Confidential Information
          unless specifically directed by Employer to do so in writing.

               (b) Nonsolicitation of Employees. While Employee is employed by
          Employer and for twenty-four (24) months after such employment ends
          for any reason, Employee, acting either directly or indirectly, or
          through any other person, firm, or corporation, will not hire contract
          with or employ any employee of Employer or induce or attempt to induce
          or influence any employee of Employer to terminate employment with
          Employer. Such nonsolicitation restriction shall not apply to Employee
          in the case of the solicitation of his or her immediate family
          members.

               (c) Covenant Against Unfair Competition. While Employee is
          employed by Employer and for twenty-four (24) months after such
          employment ends for any reason, Employee will not, directly or
          indirectly, or through any other person, firm or corporation (i) be
          employed by, consult for, have any ownership interest in or engage in
          any activity on behalf of any competing business, or (ii) call on,
          solicit or communicate with any of Employer's customers (whether
          actual or potential) for the purpose of selling precision steel balls
          and rollers and other related items to such customer other than for
          the benefit of Employer. As used in this Agreement, the term
          "competing business" means a business that is a manufacturer and
          supplier of precision steel balls and rollers to anti-

                                       5

          friction bearing manufacturers (excluding any ball and roller
          manufacturers who manufacture such products for use in their business
          or the business of their affiliates and do not supply such products to
          third parties) and the term "customer" means any customer (whether
          actual or potential) with whom Employee or any other employee of
          Employer had business contact on behalf of Employer during the
          eighteen (18) months immediately before Employee's employment with
          Employer ended). Notwithstanding the foregoing, this paragraph shall
          not be construed to prohibit Employee from owning less than five
          percent (5%) of the outstanding securities of a corporation which is
          publicly traded on a securities exchange or over-the-counter.

               (d) Return of Confidential Materials and Information. Employee
          agrees that whenever Employee's employment with Employer ends for any
          reason, all documents containing or referring to Confidential
          Information as may be in Employee's possession or control will be
          delivered by Employee to Employer immediately, with no request being
          required.

               (e) Acknowledgments; Irreparable Harm. Employee agrees that the
          restrictions on competition, solicitation and disclosure in this
          Agreement are fair, reasonable and necessary for the protection of the
          interests of Employer. Employee further agrees that a breach of any of
          the covenants set forth in this Section 4 will result in irreparable
          injury and damage to Employer for which Employer would have no
          adequate remedy at law, and Employee further agrees that in the event
          of a breach, Employer will be entitled to an immediate restraining
          order and injunction to prevent such violation or continued violation,
          without having to prove damages, in addition to any other remedies to
          which Employer may be entitled at law or equity.

               (f) Notification to Subsequent Employers. Employee grants
          Employer the right to notify any future employer or prospective
          employer of Employee concerning the existence of and terms of this
          Agreement and grants Employer the right to provide a copy of this
          Agreement to any such subsequent employer or prospective employer.

     5. Mitigation. Employer's obligation to make the payments provided for in
this Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim, right
or action which Employer may have against Employee or others. In no event shall
Employee be obligated to seek other employment or take any other action by way
of mitigation of the amounts payable to Employee under any of the provisions of
this agreement and such amounts shall not be reduced whether or not Employee
obtains other employment.

     6. Resolution of Disputes. Any dispute or claim arising out of or relating
to this Agreement shall be settled by final and binding arbitration in Johnson
City, Tennessee in accordance with the Commercial Arbitration rules of the
American Arbitration Association, and judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof. Employer
agrees to pay promptly as incurred, to the full extent permitted by law, all
legal fees and expenses which Employee may reasonably incur as a result of any
dispute (regardless of the outcome thereof) by Employer, Employee or others of
the validity or enforceability of, or liability under, any provision of this
Agreement or any guarantee of

                                       6

performance thereof (including as a result of any dispute by Employee regarding
the amount of any payment pursuant to this agreement), plus in each case
interest on any delayed payment at the rate published from time to time in The
Wall Street Journal as the prime rate of interest plus two percent (2%).

     7. Withholding. Employer may withhold from any amounts payable under this
Agreement the minimum Federal, state or local taxes as shall be required to be
withheld pursuant to any applicable law or regulation.

     8. Successors. This Agreement is binding on, and shall inure to the benefit
of Employee and Employer, and all successors and assigns of Employer. Employer
will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of Employer to assume expressly and agree to perform this Agreement in
the same manner and to the same extent that Employer would be required to
perform it if no such succession had taken place. Failure of Employer to obtain
such agreement prior to the effectiveness of any such succession shall be a
material breach of this Agreement and shall entitle Employee to any Severance
Benefit payable pursuant to Section 3(a) hereof.

     9. Applicable Law. This Agreement will be interpreted, governed and
enforced according to the law of the State of Tennessee.

     10. Separability. If any portion of this Agreement is held to be invalid or
unenforceable in any respect, Employee and Employer agree that such invalid and
unenforceable part will be modified to permit the Agreement to be enforced to
the maximum extent permitted by the court, with the remaining portions
unaffected by the invalidity or unenforceability of any part of this Agreement.

     11. Waiver. This Agreement may be modified, supplemented or amended,
and any provision of this Agreement can be waived, only by written instrument
making specific reference to this Agreement signed by the party against whom
enforcement of any such modification, supplement, amendment or waiver is sought.

     12. Complete Agreement. This Agreement contains the entire agreement
between Employer and Employee as to the subject matter hereof. This Agreement
shall not be subject to the terms and conditions of any agreement concerning
arbitration or dispute resolution between Employer and Employee.

         EMPLOYEE ACKNOWLEDGES THAT HE/SHE HAS READ THE ENTIRE CONTENTS OF THIS
AGREEMENT AND THAT HE/SHE UNDERSTANDS ITS TERMS.

                         [Signatures on following page]

                                       7

         IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as of the date first written above.

                                    EMPLOYEE:

                                    /s/ David L. Dyckman
                                    --------------------------------------------
                                    Name:  David L. Dyckman

                                    NN, INC.,
                                    including its subsidiaries and affiliates

                                     By:      /s/ Roderick R. Baty
                                       -----------------------------------------
                                                  Roderick R. Baty

                                       8

                                   Schedule A

         Employee's Severance Payment shall be a lump sum payment equal to:

1.   2 times such Employee's base salary (as of the date of Employee's
     termination); plus

2.   2 times such Employee's median bonus available at the following bonus
     target percentage: 35%; plus

3.   An amount equal to 2 times Employee's annual automobile allowance or the
     annual cost to Employee of obtaining a motor vehicle comparable to that
     provided by Employer to Employee.

                                       9Exhibit 10.26 to Form 10-K\A for NN, Inc.

Exhibit 10.26                                                 EXECUTION VERSION

                                NN EUROBALL, ApS
                              SHAREHOLDER AGREEMENT

         THIS AGREEMENT shall become effective as of the date when the Euroball
transaction closes, by and among NN, Inc. a Tennessee corporation ("NNBR"), AB
SKF, a Swedish company ("SKF"), and FAG Kugelfischer Georg Schafer AG, a German
company ("FAG").

                                    RECITALS
                                    --------

A.   The parties have purchased NN Euroball, ApS., a Danish company (the
     "Company") pursuant to the Joint Venture Formation Agreement among the
     parties dated April 6, 2000 (the "Formation Agreement"), and desire to set
     forth their mutual agreement as to certain matters related to the
     ownership, governance and operation of the Company.

B.   The capitalized terms used but not defined in this Agreement shall have the
     meaning set forth in the Formation Agreement.

C.   The initial shareholdings of the parties are as follows: NNBR - 54%, SKF -
     23%, and FAG - 23%.

                                    AGREEMENT

         In consideration of the mutual promises made herein and in the
Formation Agreement, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:

          1. Competition.

                  1.1 The business of the Company and its subsidiaries (together
         the "Company") is to manufacture, buy and sell precision steel balls
         using the Businesses previously owned by the parties to create
         marketing and sales opportunities worldwide.

                  1.2 (a) For so long as either of SKF or FAG is a shareholder
         of the Company NNBR shall be prohibited, and as long as SKF and FAG
         respectively are shareholders and for a period of three (3) years
         thereafter, SKF and FAG also shall be prohibited, directly or
         indirectly, from (i) developing or, except as allowed by Section
         1.2(b), below, acquiring any precision steel ball manufacturing
         facility that competes, directly or indirectly, with the Company in
         Europe (as defined in the Formation Agreement) (a "Competing
         Facility"), (ii) soliciting for employment any person employed by the
         Company and (iii) canvassing or soliciting customers of the Company.

                    (b) SKF and its Affiliates and FAG and its Affiliates shall
               not be deemed to have acquired, directly or indirectly, any
               Competing Facility solely by virtue of (i) the ownership of less
               than fifty (50) percent of the outstanding voting stock or debt
               securities of any publicly held company of which it does not have
               voting or day-to-day operational control, so long as such company
               is not engaged in the production of precision steel balls as its
               primary business, or (ii) having acquired or otherwise
               voluntarily having combined with a business owning a

               Competing Facility if all production of balls at the Competing
               Facility is (A) used only for bearings produced at the acquired
               business, (B) not sold to customers located in Europe or (C) sold
               to customers located within Europe at volumes not greater than
               the historical volumes of the acquired business. It is
               specifically understood that if SKF or FAG is acquired by another
               company, the restrictions in this Section will be binding only on
               SKF or FAG, respectively, and will not be binding on or apply to
               the acquiring company.

                    (c) The parties agree that NNBR shall be free to manufacture
               and sell precision steel balls everywhere in the world other than
               Europe without regard to the business interests of the Company.

                  1.3 If a Shareholder purchases or acquires an interest in
         additional ball manufacturing assets or operations in Europe, and if
         the Shareholder decides to close or sell such assets or operations, the
         Company shall have the first priority right to purchase such assets or
         operations

                  1.4 Without limitation of Section 1.2(a)(iii), SKF and its
         Affiliates and FAG and its Affiliates shall be entitled to sell
         precision steel balls to third parties if done so in relation to sales
         by them of finished bearings; provided that during the non-compete
         period applicable to SKF or FAG under Section 1.2, if such balls are
         available from the Company and historically purchased from the
         Businesses, they must be purchased by SKF, FAG or their Affiliates from
         the Company.

          2. Organization and Ownership of the Company.

                  2.1 The parties agree that the Articles of Association of the
         Company and of its initial subsidiaries shall be in the forms of
         Exhibits 2.1-A, 2.1-B, 2.1-C and 2.1-D, respectively, hereto.

                  2.2 The Company has initially an issued and paid-up share
         capital of 125,000 DKK, divided into 1250 shares which are owned as
         follows:

               Shareholder                 Shares                   Percent
               -----------                 ------                   -------
                   NNBR                     675                       54%
                   FAG                     287.50                     23%
                   SKF                     287.50                     23%

                  2.3 In the event of any conflict between the terms of this
         Agreement and the Articles of Association of the Company or of any of
         its subsidiaries, the terms of this Agreement shall, as among the
         Shareholders, prevail and the Shareholders shall forthwith cause such
         necessary alterations to be made to such Articles of Association as may
         be required to solve such conflict.

                                       2

          3.   Management of the Company.

               3.1 General Meetings and Resolutions of Shareholders.

                    (a) General Meetings shall be held whenever required by the
               laws of Denmark or the Articles of Association.

                    (b) The quorum required for a General Meeting of the
               shareholders shall be shareholders representing, in person or by
               proxy, at least fifty percent (50%) of the total number of issued
               and outstanding shares of the Company; provided that at least 30
               days prior written notice of any General Meeting has been given.
               The quorum required for any General Meeting called upon less than
               30 days prior written notice shall be one hundred percent (100%)
               of the total number of issued and outstanding shares of the
               Company.

                    (c) Unless otherwise required by the laws of Denmark or
               otherwise explicitly provided herein, no shareholders'
               resolutions shall be effective unless adopted by the affirmative
               votes of shareholders holding more than fifty percent (50%) of
               the shares present, in person or by proxy, at a General Meeting
               of the shareholders.

                    (d) Interpreters may attend General Meetings of shareholders
               upon the request of any party.

               3.2 Election of Directors and Statutory Auditors.

                    (a) The Company shall be administered by a Board of
               Directors composed of at least two (2) and not more than seven
               (7) directors.

                    (b) The Company shall have one (1) Independent Accounting
               Firm who shall be appointed by the Shareholders. Unless otherwise
               agreed in writing by all Shareholders, KPMG shall be appointed.
               The parties agree to exercise their respective voting rights as
               shareholders of the Company and to take all other necessary
               action so as to ensure that the persons nominated as statutory
               auditor(s) by the Shareholders are elected.

               3.3 Meetings and Resolutions of the Board of Directors.

                    (a) A regular meeting of the Board of Directors shall be
               held semi-annually. Meetings will be held at such times and
               locations as the Chairman shall reasonably determine. Written
               notice of all regularly scheduled meetings shall be required.
               Such notice shall be in English language and shall state the
               time, place and agenda of the meeting and shall be sent to each
               director at least fourteen (14) days prior to the meeting. Any
               director may, at least five (5) days prior to a regularly
               scheduled meeting provide written notice to the other directors
               of any matter to be discussed at the meeting.

                                       3

                    (b) Any director shall have the right to call, from time to
               time, a special meeting of the Board of Directors upon not less
               than 10 days prior written notice.

                    (c) Resolutions of the Board of Directors shall require the
               approval of the affirmative vote of a simple majority of the
               members of the Board of Directors present at a meeting.

                    (d) Interpreters may attend meetings of the Board of
               Directors upon the request of any party. Board meetings shall be
               conducted in English.

               3.4  Accounting and Reporting Obligations.

                    (a) The Company's fiscal year shall be the calendar year and
               its financial statements shall be prepared in accordance with the
               Danish Presentation of Accounts Act and shall, to the extent
               permissible under Danish law, be adjusted for the purpose of U.S.
               GAAP.

                    (b) The Company shall provide the following consolidated
               reports and statements to the Shareholders in English within the
               time periods set forth below:

                         (i) Within fifteen (15) days after the end of each
                    month, a monthly operations report, consolidated and for
                    each operating subsidiary, regarding the operating
                    parameters listed in Schedule 3.4(b)(i).

                         (ii) Within thirty (30) days after the closing of each
                    quarter, a business operations report will be provided
                    including at a minimum a balance sheet, profit and loss
                    statement, and a cash flow statement.

                         (iii) Within ninety (90) days after the end of each
                    fiscal year, an audited balance sheet, profit and loss
                    statement, and cash flow statement, a business operations
                    report, and a proposal governing appropriation of profits or
                    covering losses.

                    (c) The annual report of the Company on a consolidated basis
               shall be audited at the expense of the Company by its Independent
               Accounting Firm in accordance with applicable laws.

                    (d) The Company shall provide to each party full access to
               the books and records of the Company, and shall provide to each
               party the accounting information such party requires to comply
               with its own financial reporting requirements, provided that any
               cost involved in providing such information shall be paid by the
               requesting party.

                    (e) Each party shall, upon reasonable written notice to the
               Company and to the other parties, have reasonable access to the
               Company's books concerning the Company's financial operations.

                                       4

                    (f) Upon reasonable written notice to the Company and the
               other parties, but not more often than once every twelve (12)
               months, each party shall have the right to perform a special
               audit of the Company by independent outside auditors, at that
               party's own cost. In addition, upon reasonable notice each party
               shall have the right to perform or have performed, at that
               party's own cost, such audits as are necessary to meet such
               party's financial reporting obligations.

                    (g) The Company shall have the right, and each party hereto
               shall have the right to compel the Company, and the Company shall
               have the obligation upon request to compel any of its
               subsidiaries, to have independent outside auditors, upon
               reasonable written notice to any other party and not more than
               once each twelve (12) months, at the Company's cost, examine the
               books and records of that other party that relate to the business
               of the Company for the purpose of auditing the calculation of
               sales proceeds or any amounts due to the Company.

         4. Tax Distributions. The Company may distribute to each Shareholder,
within ninety (90) days after the end of each fiscal year of the Company, an
amount equal to any income tax payable by such Shareholder that is attributable
to the income of the Company upon receipt by the Company of a certification from
the principal financial officer of such Shareholder stating the amount of such
income tax payable by Shareholder. If such distributions are made, distributions
shall be made to all other Shareholders in proportion to their ownership
interests.

          5. Rights and Obligations of the Parties.

                  5.1 Additional Financing. Any additional financing that may be
         determined by the Board of Directors as reasonably required by the
         annual Budget of the Company may be provided by the Shareholders or by
         third parties. No party shall have any obligation whatsoever to provide
         the Company with any additional financing. Any agreement to provide
         additional financing shall be in writing.

          5.2 Transfer of Shares.

                    (a) No share of the Company owned by a Shareholder, or any
               interest therein, shall be validly sold, transferred or otherwise
               disposed of and no security interest shall be granted therein for
               consideration or otherwise, and no purported transferee shall be
               recognized as a shareholder of the Company for any purpose
               whatsoever unless such transfer is approved by all Shareholders
               or in accordance with this Section 5.

                    (b) No party shall pledge or otherwise encumber any of its
               shares or any interest therein in the Company at any time without
               the prior written consent of the other parties, provided however
               that no such consent shall be required for a blanket lien on all
               assets of a party pursuant to a commercial bank financing.

                  5.3 Put Option. SKF and FAG (each a "Holder", collectively the
         "Holders") each shall have the independent right to sell to NNBR and
         NNBR shall be required to purchase all but not less than all of the
         shares held by such Holder, subject to the following terms and
         conditions (such right is hereinafter referred to as the "Put Right"):

                                       5

                    (a) Put Exercise Period. The Put Right may not be exercised
               until after December 31, 2002 and then may only be exercised by
               written notice given to NNBR (the "Put Notice"). The Put Notice
               shall state the place, the time and the date (a "Put Closing
               Date") of the closing of such purchase (a "Put Closing"), which
               date shall not be less than 60 days from the date the Put Notice
               is received.

                    (b) Put Closing. At a Put Closing, (i) the Holder exercising
               such right shall deliver to NNBR all of the shares to be
               purchased by delivery of a certificate or certificates evidencing
               such shares so purchased by NNBR, free and clear of any liens,
               encumbrances or any interests of any other party and (ii) NNBR
               will make payment to the Holder exercising such right of the
               Purchase Price (as defined under 5.3(c) below) for the shares
               being purchased upon exercise of the Put Right by wire transfer
               of immediately available funds to an account designated by the
               Holder.

                    (c) Purchase Price. Subject to 5.3(d), below, the purchase
               price of the shares (the "Purchase Price") shall be calculated
               using the same accounting principles used to prepare the Closing
               Balance Sheet as defined in Section 5.5(a)(ii) of the Formation
               Agreement and determined in Euros by the following formula:

                                    A + B    times 0.23
                                    ------
                                        2

          Where A Equals     (1)  The average of the Company's net income for each of the 36
                                  months preceding the month in which the Put is exercised (or
                                  such fewer number of months as the Company shall have been
                                  in operation) (the "Measurement Period"), multiplied by 12,
                                  and

                             (2)  multiplied by 9.8.

          Where B Equals     (1)  The average of the Company's EBITDA for the Measurement
                                  Period, multiplied by 12, and

                             (2)  multiplied by 4.3, and

                             (3)  minus the short and long term bank loans of the Company
                                  existing at the end of the Measurement Period.

                    (d) Purchase Price Adjustment. The Purchase Price formula in
               Section 5.3(c) shall be adjusted if a party exercises its Put
               Right after June 30, 2006 by using the actual percentage
               ownership in the Company of the Holder instead of 0.23.

                                       6

     6. Termination. This Agreement shall terminate (a) when both SKF and FAG
are no longer shareholders in the Company or (b) as to any party at the time
such party is no longer a shareholder.

     7. Liquidation. The Company shall not voluntarily be liquidated or
dissolved during the two (2) year period following its effective date without
the unanimous approval of the parties. Provided that, in any event, if there is
a material breach by SKF or FAG of the Supply Agreement, the Company may be
dissolved and liquidated notwithstanding the preceding sentence.

     8. Technology Transfers.

                  8.1 Each of the parties hereby agrees to license to the
         Company, on a non-exclusive, nontransferable, fully paid up basis, any
         and all technology, know how, software, operating practices and similar
         intangible assets held by such party that are used exclusively in the
         Business of the Company and that were not previously transferred to the
         Company or a subsidiary of the Company and to execute and deliver all
         documents reasonably necessary to effect or memorialize such license
         agreement.

                  8.2 The parties shall cause the Company to license to NNBR on
         a non-exclusive, non-transferable, fully paid basis, any and all
         technology, know how, software, operating practices and similar
         intangible assets now or hereafter held by the Company that are used in
         the manufacture of precision steel balls and to execute and deliver all
         documents reasonably necessary to effect or memorialize such agreement.

         9.       Dispute Resolution; Arbitration.

                  9.1 Prior to pursuing arbitration with respect to any dispute
         hereunder, the chief executive officers or general managers of SKF, FAG
         and NNBR (or a direct subordinate officer or general manager appointed
         by them) shall meet to seek an amicable resolution to such dispute. No
         party shall be entitled to commence arbitration proceedings unless it
         has attempted for a period of forty-five (45) days from written notice
         of a dispute to reach such amicable resolution.

                  9.2 After expiration of the forty-five (45) day period
         referred to in the prior section, any and all disputes, controversies
         or claims arising out of or relating to this Agreement, or the
         transactions contemplated hereby, or the breach, termination or
         invalidity thereof, shall be settled by final and binding arbitration
         by three (3) arbitrators in accordance with the UNCITRAL Arbitration
         Rules as at present in effect. The appointing authority shall be the
         International Chamber of Commerce in Paris, France. The place of
         arbitration shall be Copenhagen, Denmark or such other location as may
         be agreed among the parties. The arbitration proceedings shall be
         conducted in the English language. Among the remedies available to
         them, the arbitrators shall be authorized to order the specific
         performance of provisions of this Agreement and of the Associated
         Agreements. The award rendered by the arbitrators may include costs of
         arbitration, reasonable counsel's fees, and reasonable costs for expert
         and other witnesses.

                                       7

                  9.3 All papers, documents or evidence, whether written or
         oral, filed with or presented to the panel of arbitrators shall be
         deemed by the parties and by the arbitrators to be Confidential
         Information. No party or arbitrator shall disclose in whole or in part
         to any other person any Confidential Information submitted in
         connection with the arbitration proceedings, except to the extent
         reasonably necessary to assist counsel in the arbitration or
         preparation for arbitration of the dispute. Confidential Information
         may be disclosed (i) to a Party's attorneys, (ii) to another Party,
         (iii) to courts for purpose of interim measures of protection,
         enforcement or similar proceedings, (iv) to outside experts requested
         by either party's counsel to furnish technical or expert services or to
         give testimony at the arbitration proceedings, subject, in the case of
         such experts, to execution of a legally binding written statement that
         such expert is fully familiar with the terms of this Section, agrees to
         comply with the confidentiality terms of this Section, and will not use
         any Confidential Information disclosed to such expert for personal or
         business advantage, or (v) as required by law or any applicable stock
         regulations.

                  9.4 The written decisions and conclusions of a majority of the
         arbitration panel shall be final and binding on the JV Parties and
         enforcement thereof may be rendered thereon by any court having
         jurisdiction upon application of any JV Party.

          10. Miscellaneous.

          10.1 Governing Law. This Agreement is governed by and shall be
     construed in accordance with, the laws of Denmark excluding any choice of
     law rules that would refer the matter to the laws of another jurisdiction.

          10.2 Force Majeure. No party shall be liable for failure to perform,
     in whole or in material part, its obligations under this Agreement if such
     failure is caused by an event or condition not existing as of the date of
     this Agreement and not reasonably within the control of the affected party,
     including without limitation, by fire, flood, typhoon, earthquake,
     explosion, strikes, labor troubles or other industrial disturbances,
     unavoidable accidents, war (declared or undeclared), acts of terrorism,
     sabotage, embargoes, blockage, acts of Governmental Authorities, riots,
     insurrections, or any other cause beyond the control of the parties the
     consequences of which could not reasonably have been avoided; provided,
     that the affected party promptly notifies the other party in writing of the
     occurrence of the event of force majeure and takes all reasonable steps
     necessary to resume performance of its obligations so interfered with.

          10.3 Notices. All notices and communications required, made or
     permitted hereunder shall be in writing and shall be delivered by hand or
     by messenger, or by recognized courier service (with written receipt
     confirming delivery), or by postage prepaid, return receipt requested,
     registered or certified airmail or telecopy, addressed:

                                       8

                           If to NNBR:               NN, Inc.
                                                     800 Tennessee Road
                                                     Erwin, TN  37650
                                                     USA
                                                     Attn:  David L. Dyckman
                                                     Fax: 423.743.8870

                           with a copy to:           Blackwell Sanders Peper Martin LLP
                                                     2300 Main St., Suite 1000
                                                     Kansas City, MO  64108
                                                     USA
                                                     Attn:  James M. Ash
                                                     Fax: 816.983.9137

                           If to SKF:                AB SKF
                                                     SKF Group Business Development
                                                     SE-415 50 Gothenberg
                                                     Sweden
                                                     Att: the Director
                                                     Fax No. 46-31-337-2077

                           With a copy to:           AB SKF Group Headquarters
                                                     SE-415 50 Gothenberg
                                                     Sweden
                                                     Att: General Counsel
                                                     Fax No. 46-31-3371691

                           If to FAG:                FAG Kugelfischer Georg Schaefer AG
                                                     Georg-Schaefer-Strasse 30
                                                     D-97421 Schweinfurt
                                                     Germany
                                                     Attn:  Rechtsabteilung-FR
                                                     Fax:  49-97-21 91 31 21

                           With a copy to:           FAG Kugelfischer Georg Schaefer AG
                                                     D-97421 Schweinfurt
                                                     Germany
                                                     Att: Technische Koordination - VT
                                                     Fax:  49-97-21-91-34-17

                  Each such notice or other communication shall for all purposes
         hereunder be treated as effective or as having been given as follows:
         (i) if delivered in person, when delivered, (ii) if sent by airmail, at
         the earlier of its receipt or at 5 p.m. local time of the recipient, on
         the seventh day after deposit in a regularly maintained receptacle for
         the deposit of airmail, (iii) if sent by a recognized courier service,
         on the date shown in the written confirmation of delivery issued by
         such delivery service and (iv) on the next

                                       9

          business day after the date of the transmission in case of telecopy
          with a telecopy receipt. Either party may change the addresses and/or
          addressees to whom notice may be given by giving notice pursuant to
          this section at least seven (7) days prior to the date the change
          becomes effective.

                  10.4 Waiver. No delay or omission by a party in exercising any
         of its rights hereunder shall operate as a waiver of that or any other
         right. Unless otherwise expressly stated, a waiver given by a party on
         any one occasion shall be effective only in that instance and shall not
         be construed as a waiver of that right on any other occasion.

                  10.5 Amendment. The parties may amend, modify, and supplement
         this Agreement, but such amendment, modification or supplement shall be
         valid only if made in writing signed by all parties.

                  10.6 Entire Agreement. This Agreement (of which the Exhibits
         and Schedules attached hereto form an integral part), the Company
         organizational documents, and the Formation Agreement embody the entire
         agreement among the parties hereto with respect to the formation of the
         Company and its governance and supersede all prior agreements and
         understandings relating to such subject matter.

                  10.7 Successors. This Agreement shall be binding upon and
         inure to the benefit of each of the parties hereto and their respective
         successors and permitted assigns.

                  10.8 Headings. The headings used in this Agreement are for
         convenience only, do not constitute a part of this Agreement, and shall
         not be used as an aid to the interpretation of this Agreement.

                  10.9     Severability.

                         (a) If due to a change in any applicable law or due to
                    a decision or other act (including failure to act) by any
                    competent authority one or more of the provisions of this
                    Agreement can no longer be enforced or any amendment of one
                    or more of the provisions of this Agreement is required, the
                    parties agree that they shall endeavor to find an alternate
                    solution approaching as near as possible the contractual
                    situation existing prior to such a change, decision or act.

                         (b) If any provision of this Agreement is determined to
                    be invalid or unenforceable, the remaining provisions shall
                    not be effected thereby, and this Agreement shall be
                    administrated as though the invalid or unenforceable
                    provision was not a part of this Agreement

                  10.10    Confidentiality.

                         (a) Limited Use. Except as expressly authorized by any
                    other party, each party agrees not to disclose, use or
                    permit the disclosure or use by others of any trade secrets,
                    know-how, data, formulas, processes, tools and techniques,
                    software algorithms and routines, intellectual property or
                    other information tangible or intangible ("Confidential
                    Information") of such other party unless and

                                       10

                    to the extent such Confidential Information (i) is not
                    marked or designated in writing as confidential and is
                    provided for a purpose that reasonably contemplates
                    disclosure to or use by others; provided, however, that
                    information disclosed orally that is later designated in
                    writing as confidential shall be treated as Confidential
                    Information except to the extent it has already been
                    disclosed or used by the receiving party, (ii) becomes a
                    matter of public knowledge through no action or inaction of
                    the party receiving the Confidential Information, (iii) was
                    in the receiving party's possession before receipt from the
                    party providing such Confidential Information, (iv) is
                    rightfully received by the receiving party from a third
                    party without any duty of confidentiality, (v) is disclosed
                    to a third party by the party providing the Confidential
                    Information without a duty of confidentiality on the third
                    party, (vi) is disclosed with the prior written approval of
                    the party providing such Confidential Information, or (vii)
                    is independently developed by the receiving party without
                    any use of either of the other parties' Confidential
                    Information. Information shall not be deemed to be available
                    to the general public for the purpose of the exclusion (ii)
                    above with respect to each party merely because it is
                    embraced by more general information in the prior possession
                    of recipient or others.

                         (b) Treatment. In furtherance, and not in limitation of
                    the foregoing Section 10.10(a), each party agrees to do the
                    following with respect to any such Confidential Information:
                    (i) exercise the same degree of care to safeguard the
                    confidentiality of, and prevent the unauthorized use of,
                    such information as that party exercises to safeguard the
                    confidentiality of its own Confidential Information; (ii)
                    restrict disclosure of such information to those of its
                    employees and agents who have a need to know, and (iii)
                    instruct and require such employees and agents to maintain
                    the confidentiality of such information and not to use such
                    Confidential Information except as expressly permitted
                    herein. Each party further agrees not to remove or destroy
                    any proprietary or confidential legends or markings placed
                    upon any documentation or other materials.

                         (c) Agreement Confidential. The foregoing
                    confidentiality obligation shall also apply to the contents
                    of this Agreement.

                         (d) Disclosure. The obligations under this Section
                    10.10 shall not prevent the parties from disclosing the
                    Confidential Information or terms of this Agreement to any
                    governmental authority as required by law or applicable
                    stock regulations (provided that the party intending to make
                    such disclosure in such circumstances has given the
                    appropriate other party prompt notice prior to making such
                    disclosure so that other party may seek a protective order
                    or other appropriate remedy prior to such disclosure and
                    cooperates fully with that party in seeking such order or
                    remedy).

                         (e) Survival. The provisions of this Section shall
                    survive the expiration and any termination of this
                    Agreement.

                                       11

                  10.11 Further Assurances. Each party will do all acts and
         things and execute all documents and instruments which the other party
         reasonably requests in order to carry out or give further effect to the
         provisions of this Agreement.

                  10.12 Counterparts. This Agreement may be executed in three or
         more counterparts, each of which shall be deemed an original, but all
         of which together shall constitute but one and the same instrument.

                  10.13    Relationship of Parties and the Company.

                         (a) The relationship between NNBR, SKF and FAG is that
                    of independent contractors and co-owners of the Company, and
                    nothing in this Agreement shall be construed to constitute
                    one as an employee, partner, or agent of the other. Without
                    limiting the foregoing, neither NNBR, SKF nor FAG shall have
                    the authority to act for or to bind the other in any way.

                         (b) All transactions between NNBR and the Company shall
                    be on an arms-length basis and on market conditions. The
                    Company will notify SKF and FAG whenever the Company enters
                    into a transaction with NNBR. SKF and FAG shall have the
                    right to audit the books and records of the Company to
                    ensure compliance with this subsection.

                             Signature Page Follows

                                       12

                                 Signature Page

         IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
signed as of the date first written above.

                                  NNBR

                                  By:      /s/ David L. Dyckman
                                     -------------------------------------------
                                               David L. Dyckman

                                  AB SKF
                                  [publ]

                                  By:      /s/ Kaj Thoren
                                     -------------------------------------------
                                                Kaj Thoren

                                  FAG

                                  By:    /s/ Dr. Uwe Loos  /s/ Dr. Gerhard Vogel
                                     -------------------------------------------
                                             Dr. Uwe Loos      Dr. Gerhard Vogel

                                       13

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