-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LoB8VcnT0M08yGWzPYtuzBW4eKyROPEL4lDStxWpi4SsQTLp3zPhg+2JOHJvf8yq taJGBhMNaQThTjRH4O60LA== 0000950124-96-000622.txt : 19960216 0000950124-96-000622.hdr.sgml : 19960216 ACCESSION NUMBER: 0000950124-96-000622 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960213 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BRIGGS & STRATTON CORP CENTRAL INDEX KEY: 0000014195 STANDARD INDUSTRIAL CLASSIFICATION: ENGINES & TURBINES [3510] IRS NUMBER: 390182330 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-01370 FILM NUMBER: 96516481 BUSINESS ADDRESS: STREET 1: 12301 W WIRTH ST CITY: WAUWATOSA STATE: WI ZIP: 53222 BUSINESS PHONE: 4142595333 MAIL ADDRESS: STREET 1: P O BOX 702 CITY: MILWAUKEE STATE: WI ZIP: 53201 10-Q 1 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from_______________ to _______________ Commission file number 1-1370 BRIGGS & STRATTON CORPORATION - ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) A Wisconsin Corporation 39-0182330 - ------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 12301 West Wirth Street, Wauwatosa, Wisconsin 53222 - ------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) 414/259-5333 - ------------------------------------------------------------------------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Outstanding at Class February 8, 1996 - -------------------------------------------------------------------------------- COMMON STOCK, par value $0.01 per share 28,927,000 Shares -1- 2 BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES INDEX Page No. -------- PART I - FINANCIAL INFORMATION Item 1. Financial Statements: Consolidated Condensed Balance Sheets - December 31, 1995, July 2, 1995 and January 1, 1995 3 Consolidated Condensed Statements of Income - Three Months and Six Months Ended December 31, 1995 and January 1, 1995 4 Consolidated Condensed Statements of Cash Flows - Six Months Ended December 31, 1995 and January 1, 1995 5 Notes to Consolidated Condensed Financial Statements 6 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition 7 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 9 -2- 3 BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS CONSOLIDATED CONDENSED BALANCE SHEETS (In thousands of dollars) ASSETS
Dec.31 July 2 Jan. 1 1995 1995 1995 --------- ------- -------- CURRENT ASSETS: (Unaudited) (Unaudited) Cash and cash equivalents $ 6,323 $170,648 $ 10,956 Receivables, net 270,142 94,116 288,973 Inventories - Finished products and parts 156,117 96,540 109,970 Work in process 44,087 40,107 35,004 Raw materials 4,560 4,027 5,469 ---------------------------------- Total inventories $204,764 $140,674 $150,443 Future income tax benefits 31,744 31,376 32,349 Prepaid expenses 14,796 16,516 20,001 ---------------------------------- Total current assets $527,769 $453,330 $502,722 ---------------------------------- PREPAID PENSION COST $ 727 $ - $ 7,873 ---------------------------------- DEFERRED INCOME TAX ASSET $ 4,157 $ 1,866 - ---------------------------------- PLANT AND EQUIPMENT, at cost: $759,178 $726,331 $692,563 Less - Accumulated depreciation and unamortized investment tax credit 387,056 383,034 390,223 ---------------------------------- Total plant and equipment, net $372,122 $343,297 $302,340 ---------------------------------- $904,775 $798,493 $812,935 ================================== LIABILITIES & SHAREHOLDERS' INVESTMENT CURRENT LIABILITIES: Accounts payable $ 62,251 $ 63,913 $ 58,798 Domestic notes payable 101,558 6,750 1,750 Foreign loans 20,066 19,653 21,595 Accrued liabilities 94,602 108,817 109,506 Dividends payable 7,521 - 7,232 Federal and state income taxes 12,815 (1,878) 13,571 ---------------------------------- Total current liabilities $298,813 $197,255 $212,452 ---------------------------------- DEFERRED INCOME TAX LIABILITY $ - $ - $ 9,660 ---------------------------------- ACCRUED EMPLOYEE BENEFITS $ 17,260 $ 16,447 $ 15,918 ---------------------------------- ACCRUED PENSION COST $ - $ 1,606 - ---------------------------------- ACCRUED POSTRETIREMENT HEALTH CARE OBLIGATION $ 69,143 $ 68,707 $ 65,341 ---------------------------------- LONG-TERM DEBT $ 75,000 $ 75,000 $ 75,000 ---------------------------------- SHAREHOLDERS' INVESTMENT: Common stock- Authorized 60,000,000 shares, $.01 par value Issued and outstanding 28,927,000 shares $ 289 $ 289 $ 289 Additional paid-in capital 41,327 41,698 42,059 Retained earnings 403,209 397,627 393,388 Cumulative translation adjustments (266) (136) (1,172) ---------------------------------- Total shareholders' investment $444,559 $439,478 $434,564 ---------------------------------- $904,775 $798,493 $812,935 ==================================
The accompanying notes are an integral part of these statements. -3- 4 BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME (In thousands of dollars except amounts per share) (Unaudited)
Three Months Ended Six Months Ended ------------------ ----------------- Dec. 31 Jan. 1 Dec. 31 Jan. 1 1995 1995 1995 1995 ------- -------- ------- --------- NET SALES $329,357 $366,717 $518,834 $594,562 COST OF GOODS SOLD 263,594 283,193 433,930 471,239 -------- -------- -------- -------- Gross profit on sales $ 65,763 $ 83,524 $ 84,904 $123,323 ENGINEERING, SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 24,801 26,697 49,284 48,973 --------- ------- -------- -------- Income from operations $ 40,962 $ 56,827 $ 35,620 $ 74,350 INTEREST EXPENSE (2,919) (2,121) (4,976) (4,212) OTHER INCOME, net 541 557 2,620 3,859 -------- -------- -------- -------- Income before provision for income taxes $ 38,584 $ 55,263 $ 33,264 $ 73,997 PROVISION FOR INCOME TAXES 14,660 21,550 12,640 28,860 -------- -------- -------- -------- Net income $ 23,924 $ 33,713 $ 20,624 $ 45,137 ======== ======== ======== ======== PER SHARE DATA* - Net income $ .82 $ 1.17 $ .71 $ 1.56 ====== ====== ====== ====== Cash dividends $ .26 $ .25 $ .52 $ .48 ====== ====== ====== ======
* Based on 28,927,000 shares outstanding. The accompanying notes are an integral part of these statements. -4- 5 BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS Increase(Decrease) in Cash and Cash Equivalents (In thousands of dollars) (Unaudited)
Six Months Ended ---------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Dec. 31, 1995 Jan. 1, 1995 ------------- ------------ Net income $ 20,624 $ 45,137 Adjustments to reconcile net income to net cash provided by operating activities - Depreciation 20,938 22,662 (Gain)Loss on disposition of plant and equipment 680 (7) (Increase)decrease in operating assets - Accounts receivable (176,026) (166,376) Inventories (64,090) (64,773) Other current assets 1,352 1,066 Other assets (3,018) 808 Increase(decrease) in liabilities - Accounts payable and accrued liabilities 6,337 3,686 Other liabilities (357) (900) --------- -------- Net cash used by operating activities $(193,560) $(158,697) --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Additions to plant and equipment $ (51,423) $ (41,416) Proceeds received on sale of plant and equipment 928 2,032 --------- --------- Net cash used in investing activities $ (50,495) $ (39,384) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Net borrowings on domestic and foreign loans $ 95,221 $ 2,022 Dividends (15,042) (13,885) Purchase of common stock for treasury (547) (295) Proceeds from exercise of stock options 176 140 --------- --------- Net cash provided(used) by financing activities $ 79,808 $ (12,018) --------- --------- EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS $ (78) $ (46) --------- --------- NET DECREASE IN CASH AND CASH EQUIVALENTS $(164,325) $(210,145) CASH AND CASH EQUIVALENTS, beginning 170,648 221,101 --------- --------- CASH AND CASH EQUIVALENTS, ending $ 6,323 $ 10,956 ========= ========= SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Interest paid $ 4,596 $ 4,180 ========= ========= Income taxes paid $ 2,576 $ 26,748 ========= =========
The accompanying notes are an integral part of these statements. -5- 6 BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited) The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and therefore do not include all information and footnotes necessary for a fair presentation of financial position, results of operations and cash flows in conformity with generally accepted accounting principles. However, in the opinion of the Company, adequate disclosures have been presented to make the information not misleading, and all adjustments necessary to present fair statements of the results of operations and financial position have been included. All of these adjustments are of a normal recurring nature. It is suggested that these condensed financial statements be read in conjunction with the financial statements and the notes thereto included in the Company's latest annual report on Form 10-K. During the current quarter, the Company recorded a change in an accounting estimate originally made in the last quarter of fiscal 1995. During that period, a charge totaling $19,059,000 was added to pension and postretirement health care expenses to reflect the costs of early retirement windows that were offered and accepted at the end of fiscal 1995. In October 1995, when the retirements were to occur, a number of those employees who had accepted the offer canceled their acceptance, and thus a credit totaling $3,477,000 was recorded as a change in the original accounting estimate during the second quarter of fiscal 1996. The Financial Accounting Standards Board issued SFAS No. 123 "Accounting for Stock-Based Compensation" in October 1995, which establishes financial accounting and reporting standards for stock-based employee compensation. The Company plans to adopt only the pro forma disclosure requirements of this statement, and will continue to apply the accounting provisions of APB Opinion No. 25 to stock-based employee compensation arrangements, as is allowed by the statement. This disclosure will be effective for the financial statements ending in June 1997. -6- 7 BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES PART I - FINANCIAL INFORMATION ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION The following is Management's discussion and analysis of certain significant factors which have affected the Company's results of operations and financial condition during the periods included in the accompanying consolidated condensed financial statements. RESULTS OF OPERATIONS SALES Net sales for the second fiscal quarter of 1996 decreased 10% or $37,360,000 compared to the same period in the preceding year. Approximately two-thirds of this decrease is attributable to the absence of lock sales. This business was spun off to the shareholders at the end of February 1995. The remaining portion of the change is due to a 7% decrease in engine units sold between years. This occurred because domestic manufacturers of lawn and garden equipment continued their reduced production rates from the first fiscal quarter. As was the case in the first quarter, the decrease in unit sales was larger than the decrease in sales dollars because it occurred primarily in the Company's lower selling price small engine line. There were small improvements in export sales for the quarter which were offset by reductions in service sales. Net sales for the six months ended December 1995 decreased 13% to $518,834,000. Over half of this decrease was attributable to the spun-off lock business. Engine unit shipments were down 13%. All other comments made above are applicable to this period. GROSS PROFIT Gross profit decreased 21%, reflecting a decrease in rate from 23% last year to 20% in the current year. This decrease was the result of the absence of gross profit from the spun-off lock business, lower unit sales, the spreading of fixed costs over fewer engine units and the expected lower manufacturing efficiency associated with the four new plants. Partially offsetting this was lower profit sharing accruals, the credit resulting from a change in an accounting estimate (described in the notes on page 6), and a small reduction in aluminum costs, the major raw material used in the manufacture of engines. The same factors caused the decrease in gross profits of $38,419,000 or 31% when comparing the first six months of fiscal 1996 to the same period in fiscal 1995. Added to these factors was the first quarter start-up cost of the new plants which totaled $9,800,000. -7- 8 BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES PART I - FINANCIAL INFORMATION (Continued) ENGINEERING, SELLING, GENERAL AND ADMINISTRATIVE EXPENSES This category of expenses decreased $1,896,000 or 7% between the second quarter of fiscal 1996 and 1995. This decrease resulted primarily from the lack of engineering and selling expenses that were part of the spun-off lock business and lower profit sharing accruals. Six-month comparison in this category reflects a 1% increase between years. Larger advertising and marketing expenses in the first quarter were almost offset by the reductions described in the preceding paragraph. INTEREST EXPENSE Interest expense for the second fiscal quarter of 1996 increased 38% over the same period in the preceding year. This increase reflects the use of domestic short-term borrowing to finance increases in accounts receivable and inventories and capital expenditures associated with plant projects described later. There was no domestic short-term borrowing in the second quarter of the preceding year. The same factors effected the six-month interest experience comparisons. OTHER INCOME Other income was comparable between quarters. However, the six-month comparison reflects a 32% reduction due to lower investment income because of the lack of investable funds. PROVISION FOR INCOME TAXES The effective tax rate used for the first six months of operations was 38%. This rate reflects management's estimate of what the rate will be for the entire fiscal year. OUTLOOK The outlook for retail sales of outdoor power equipment this spring seems to be good. The econometric forecasting services the Company uses predicts retail sales will be somewhat stronger than last spring, assuming normal weather. Retailers are optimistic, and their indications to their equipment suppliers reflect their optimism. Equipment manufacturers are optimistic, too, and their indications reflect their optimism. However, the rate at which they are taking engines does not validate their optimism. Unless this rate changes soon, prudence will dictate that the Company should reduce assembly rates so as to keep the end of season inventory within a reasonable range. It now appears that earnings for the third quarter are unlikely to reach last year's record level and that a return to favorable comparisons will be postponed to the fourth quarter. It is now certain that earnings for the full year will be lower than for last year. -8- 9 BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES PART I - FINANCIAL INFORMATION (Continued) FINANCIAL CONDITION Cash and cash equivalents decreased $164,325,000 since the end of the previous fiscal year. Cash was used to finance the $176,026,000 increase in accounts receivable, the $64,090,000 increase in inventories, capital expenditures totaling $51,423,000, and payment of dividends totaling $15,042,000. Additional funds were obtained from net profits and depreciation and new short-term debt. The increase in accounts receivable is a normal seasonal increase at this time of the year. Inventory increases are mostly in the finished goods category which reflects the Company's continued maintenance of a stable rate of production. The continuance of this production rate was discussed previously in the Outlook section. Additions to plant and equipment during the first six months of fiscal 1996 totaled $51,423,000. Capital projects involving three new engine plants, a foundry and plant expansions were substantially completed during the December quarter. These new plants are now in operation. The Company plans to spend approximately $30,000,000 of additional capital expenditures on other projects during the remainder of the fiscal year. CALIFORNIA EMISSION STANDARDS Recently the California Air Resources Board has granted the Company's request that the California standard for carbon monoxide be relaxed to harmonize it with that adopted by the U.S. Environmental Protection Agency (EPA). As a result of this change, a wider range of the Company's engines will meet California's current emission standards. PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits.
Exhibit Number Description ------ ----------- 10.3(c) Amendment to Economic Value Added Incentive Compensation Plan. (Filed herewith.) 10.11 Officer Employment Agreement. (Filed herewith.) 10.12 Deferred Compensation Plan for Directors. (Filed herewith.) 27 Financial Data Schedule. (Filed herewith.)
-9- 10 BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES PART II - OTHER INFORMATION (Continued) (b) Reports on Form 8-K. There were no reports on Form 8-K for the second quarter ended December 31, 1995. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. BRIGGS & STRATTON CORPORATION ----------------------------- (Registrant) Date: February 8, 1996 /s/ R. H. Eldridge ------------------------------------------ R. H. Eldridge Executive Vice President & Chief Financial Officer, Secretary-Treasurer Date: February 8, 1996 /s/ J. E. Brenn ------------------------------------------ J. E. Brenn Vice President and Controller -10- 11 BRIGGS & STRATTON CORPORATION EXHIBIT INDEX
Exhibit Number Description ------ ----------- 10.3(c) Amendment to Economic Value Added Incentive Compensation Plan (Filed herewith) 10.11 Officer Employment Agreement (Filed herewith) 10.12 Deferred Compensation Plan for Directors (Filed herewith) 27 Financial Data Schedule (Filed herewith)
EX-10.3(C) 2 AMENDMENT TO COMPENSATION PLAN 1 BRIGGS & STRATTON CORPORATION Form 10-Q for Quarterly Period Ended December 31, 1995 Exhibit No. 10.3(c) AMENDMENT TO BRIGGS & STRATTON CORPORATION ECONOMIC VALUE ADDED INCENTIVE COMPENSATION PLAN RESOLVED, that Section V.B. Target Incentive Awards., of the Briggs & Stratton Corporation Economic Value Added Incentive Compensation Plan be amended by deleting "Secretary-Treasurer" from the list of Executive Positions. EX-10.11 3 EMPLOYMENT AGREEMENT 1 BRIGGS & STRATTON CORPORATION Form 10-Q for Quarterly Period Ended December 31, 1995 Exhibit No. 10.11 OFFICER EMPLOYMENT AGREEMENT 2 AGREEMENT This Agreement is made this 26th day of October, 1995, by and between Briggs & Stratton Corporation, a Wisconsin corporation (the "Employer") and James A. Wier (the "Employee"). In consideration of the promises set forth herein, the parties hereto agree as follows: 1. Employment. Employer shall employ Employee from the date hereof until June 30, 2000, unless such employment shall be terminated earlier as specified herein. During the term specified in the preceding sentence, Employee's position (including status, offices, titles and reporting requirements), authority, duties and responsibilities shall be at least commensurate in all material respects with the most significant of those held, exercised and assigned immediately preceding the date hereof and the Employee's service shall be performed at the location where he was employed immediately preceding the date hereof or any office or location less than 35 miles from such location. Employer may terminate Employee's employment at any time for any of the following causes: (a) the continuing inability of the Employee, for a period of at least 90 days, to perform and carry out his duties and responsibilities under this Agreement for any reason, including mental or physical disability. The determination of such inability shall be made in the sole discretion of the Board of Directors of the Employer; (b) gross negligence or repeated neglect by Employee in the performance of duties for Employer; (c) material breach by Employee of the terms of this Agreement; or (d) death. 2. Salary. During the term specified in Section 1 hereof, Employer shall pay Employee a monthly salary of no less than $18,708.33, payable in semi-monthly installments, or at such other intervals as salary is paid to other senior executives of the Employer generally. 3. Other Compensation and Benefits. Except as specified in this Section 3 and Sections 4 and 5 hereof, Employee shall participate in such executive compensation structures and employee benefit plans as shall cover senior executives of the Employer generally and his participation and benefits (and the participation and benefits of any person claiming through his status as a 3 participant) shall be governed by the terms and conditions of such structures and plans. Effective with respect to stock option grants made during and after 1996, the number of stock options which shall be granted Employee shall be one-half of the number of options which would have been granted to him by application of the formula or other method of determination used by the Employer for the grant of options to other senior executives of the Employer at the time in question. For purposes of determining any cash bonus to which Employee may be entitled and the computation of which is a function of base salary, Employee's monthly base salary during the term covered hereby shall be deemed to be actual base salary, plus $4,166.67. 4. Supplemental Pension Benefits. If Employee's employment shall continue until June 30, 2000, he shall be entitled to a monthly pension benefit commencing July 1, 2000 equal to $20,833.33, which shall be payable in the form of a joint and 50% survivor annuity -- i.e., the monthly pension shall be $20,833.33 during Employee's lifetime, and should the spouse to whom he was legally married on July 1, 2000 survive him, she will be paid a monthly annuity for her life of $10,416.67. Such amounts shall include any amounts to which the Employee and such surviving spouse may be entitled under any qualified defined benefit pension plan maintained by the Employer and any unfunded supplemental defined benefit pension plan maintained by the Employer. To the extent that Employee is covered by a plan or plans described in the preceding sentence, he shall make all such elections and file all such papers as the Employer shall require so that benefits under such plans shall be payable in the form and at the time specified in the first sentence of this Section 4. To the extent that the benefits specified under this Section 4 exceed the benefits payable under such plans, any and all such benefits shall be an unfunded obligation of the Employer as to which the Employee and any person claiming through the Employee shall be merely a general unsecured creditor of the Employer; provided that the Company shall cause this benefit to be covered by the "rabbi" trust which it maintains with respect to other executive benefits. If Employee's employment is terminated prior to June 30, 2000, under the rules of Section l.a. hereof, he shall be entitled to the benefits described in the first paragraph of this Section 4, commencing on the first day of the first calendar month commencing after the date that his employment is so terminated except that the number set forth in the schedule below, which corresponds to the date that his employment is so terminated, shall be substituted for $20,833.33 (and one-half of such number shall be substituted for $10,416.67). 4
Date of Termination of Employment Monthly Benefit Amount --------------------------------- ---------------------- On or after July 1, 1999, but prior to June 30, 2000 $20,000.00 On or after July 1, 1998, but prior to June 30, 1999 $19,166.67 On or after July 1, 1997, but prior to June 30, 1998 $18,333.33 On or after July 1, 1996, but prior to June 30, 1997 $17,500.00 Prior to June 30, 1996 $16,666.67
5. Medical Coverage. If Employee's employment shall continue until June 30, 2000, he shall be entitled to purchase medical coverage for the period commencing on his separation from service and continuing until he reaches age 65 as though he were covered by the medical coverage continuation rules of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA") for that entire period. 6. Competition. As a condition to the receipt of the benefits described in Section 4 hereof which are in excess of the benefits which would otherwise be payable to Employee under any qualified defined benefit pension plan or unfunded supplemental defined benefit pension plan maintained by Employer and covering other senior executives of the Employer, Employee agrees to abide by the terms of this Section 6. For a period of 3 years after the Employee's separation from service with the Employer, Employee will not, directly or indirectly, own, manage, operate, control, be connected with the ownership, management, operation or control of any entity in the United States of America which competes with the Employer, or be employed by, perform service for, consult with or solicit business for any such entity. Employee agrees that the restrictions set forth in this Section 6 are fair and reasonable and are reasonably required for the protection of the Employer. Employer's sole remedy for Employee's breach of this Section 6 shall be to forever withhold from Employee, and any person claiming through Employee, any further payments described in the first clause of the first sentence of this Section 6. 7. Release. As a condition to the receipt of the benefits described in the first clause of the first sentence of Section 6 hereof, the Employee shall execute such release as the Employer shall specify. 5 8. Integration. This Agreement sets forth the entire agreement of the parties hereto, and it supersedes any and all prior agreements, contracts and understandings between the parties hereto, whether written or oral, with regard to the subject matter hereof, including without limitation, the two documents each entitled "Employment Agreement, one of which is dated November 20, 1987, and the other of which is dated February 19, 1990. This Agreement may be amended only in writing executed by the parties hereto. 9. Governing Law. This Agreement shall be governed by the internal laws of the State of Wisconsin. 10. Binding Effect. The rights and obligations of the Employer hereunder shall inure to the benefit of and shall be binding upon the respective successors and assigns of Employer. 11. Non-waiver. The waiver by Employer of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any other or subsequent breach by the Employee. 12. Board Approval. This Agreement shall be subject to the approval of the Nominating and Salaried Personnel Committee of the Board of Directors of the Employer. 13. Headings. Headings are for convenience of reference only. BRIGGS & STRATTON CORPORATION By: /s/ F. P. Stratton, Jr. /s/ James A. Wier ------------------------------------ ------------------------- Its: Chairman & Chief Executive Officer James A. Wier ------------------------------------ EX-10.12 4 COMPENSATION PLAN FOR DIRECTORS 1 BRIGGS & STRATTON CORPORATION Form 10-Q for Quarterly Period Ended December 31, 1995 Exhibit No. 10.12 DEFERRED COMPENSATION PLAN FOR DIRECTORS 2 BRIGGS & STRATTON CORPORATION DEFERRED COMPENSATION PLAN FOR DIRECTORS AS AMENDED AND RESTATED TO January 16, 1996 SECTION I PURPOSE The purpose of the Briggs & Stratton Corporation Deferred Compensation Plan for Directors is to offer Non-Employee Directors the opportunity to defer all or a portion of their Compensation for future services as a member of the Board of Directors. SECTION II DEFINITIONS a. "Beneficiary" shall mean the person or persons designated from time to time in writing by a Participant to receive payments under the Plan after the death of such Participant, or, in the absence of any such designation or in the event that such designated person or persons shall predecease such Participant, his estate. b. "Common Share Unit" shall mean a Deferred Amount which is converted into a unit or fraction of a unit for purposes of the Plan by dividing a dollar amount by the Fair Market Value of one of the Corporation's common shares. c. "Corporation" shall be Briggs & Stratton Corporation. d. "Compensation" shall mean payments which the Participant receives from the Corporation for services, including retainer fees, meeting fees, and consent resolution fees. e. "Deferred Amount" shall mean an amount of Compensation deferred under the Plan and carried during the deferral period in any Account provided for in the Plan. f. "Distribution Date" shall mean the date designated by a Participant in the Notice of Election form for distribution of the Participant's Accounts. g. "Dividend Equivalent" shall mean an amount equal to the cash dividend paid on one of the Corporation's common shares credited to an Account for each Common Share Unit credited to such Account. 3 h. "Fair Market Value" shall mean the closing price of the Corporation's common shares as reported by the New York Stock Exchange or such other exchange or national market system on which the Corporation's common shares may then be listed or quoted. i. "Non-Employee Director" shall mean any duly elected or appointed member of the Board of Directors of the Corporation who is not an employee of the Corporation or of any subsidiary of the Corporation. j. "Participant" shall mean any Non-Employee Director who elects to defer any amount of Compensation under the Plan. k. "Plan" shall mean this Briggs & Stratton Corporation Deferred Compensation Plan for Directors, as amended and restated. l. "Secretary" shall mean the duly elected Secretary of the Corporation. SECTION III ELECTION, MODIFICATION AND TERMINATION PROCEDURES Any Non-Employee Director wishing to participate in the Plan must file with the Secretary of the Corporation at P. O. Box 702, Milwaukee, Wisconsin 53201, a written Notice of Election on the form attached as Exhibit "A" to defer payment of all or a portion of the Non-Employee Director's Compensation payable in the future. An effective election with respect to Compensation, payment of which has been deferred under the terms of this Plan, may not be modified or revoked. An effective election with regard to future Compensation, payment of which has not yet been deferred, may be modified by filing a new Notice of Election or may be terminated by filing a Notice of Termination on the form attached as Exhibit "B". SECTION IV ESTABLISHMENT AND ADMINISTRATION OF DEFERRED DIRECTORS' COMPENSATION ACCOUNTS The amount of any Participant's Compensation deferred in accordance with an election shall be credited to an Account maintained by the Corporation. Such Account shall remain a part of the general funds of the Corporation, and nothing contained in this Plan shall be deemed to create a trust or fund of any kind or create any fiduciary relationship. The Director shall elect to have any deferrals hereunder credited with earnings in accordance with (a) or (b) below: 2 4 (a) Fixed Rate Account As of the last day of each calendar quarter, the portion of the Participant's Deferred Amount for which the Participant has selected earnings to be credited pursuant to this subsection (a) shall be adjusted as follows: (1) The Participant's Account shall first be charged with any distributions made during the quarter. (2) The Participant's Account balance shall then be credited with a supplemental amount for that quarter. Such supplemental amount shall be computed by multiplying the Account balance after the adjustment provided for in Subsection (1) by a fraction, the numerator of which is 80% of the prevailing prime interest rate at the Firstar Bank of Milwaukee on the last business day of the quarter, and the denominator of which is four (4). (3) Finally, the Account shall be credited with the amount, if any, of Compensation deferred during that quarter. (b) Briggs & Stratton Common Share Unit Account Compensation deferred into a Common Share Unit Account shall be credited to the Account on the same date when it would otherwise by payable to the Participant. Such Deferred Amounts shall be converted into a number of Common Share Units on the date credited to the Account by dividing the Deferred Amount by the Fair Market Value on such date. If Common Share Units exist in a Participant's Account on a dividend record date for the Corporation's common shares, Dividend Equivalents shall be credited to the Participant's Account on the related dividend payment date, and shall be converted into the number of Common Share Units which could be purchased with the amount of Dividend Equivalents so credited. In the event of any change in the Corporation's common shares outstanding, by reason of any stock split or dividend, recapitalization, merger, consolidation, combination or exchange of stock or similar corporate change, the Secretary shall make such equitable adjustments, if any, by reason of any such change, deemed appropriate in the number of Common Share Units credited to each Participant's Account. A separate record of each deferred Participant's Account shall be maintained by the Corporation for each Participant in the Plan. 3 5 SECTION V PAYMENT OF DEFERRED DIRECTORS' COMPENSATION Deferred Amounts shall be paid to a Participant or, in the event of death, to his designated Beneficiary in accordance with the Notice of Election and Beneficiary Designation forms that have been filed with the Secretary of the Corporation. If a Participant elects to receive payment of his Deferred Amount in annual installments rather than in a lump sum, the payment period shall not exceed ten years following the payment commencement date. The amount of any installment payment shall be determined by multiplying the balance of the Participant's unpaid Account on the date of such installment by a fraction, the numerator of which is one and the denominator of which is the number of remaining unpaid installments. Such account balance shall be appropriately reduced to reflect the installment payment made hereunder. In no event will an installment payment be less than $1,000.00 and all installments will be paid annually as soon as it practicable after commencement of the calendar year selected by the Participant. If a Participant shall die prior to the receipt of all installment payments, any unpaid balance of deferred fees and supplemental amounts shall be paid in one lump sum to his designated Beneficiary(s) as soon as practicable following the month of death. SECTION VI WHEN PAYMENT OF DEFERRED AMOUNTS COMMENCES Compensation may be deferred until any date but no later than the year in which the Participant attains the age of seventy-one years. The payment in a lump sum or installments of amounts deferred pursuant to an election under the Plan shall commence as soon as practicable during the first year to which payment has been deferred, and shall be paid in accordance with the terms of such election. If a Participant shall die prior to the first year to which payment has been deferred, such payment shall be made as soon as practicable immediately following the month of death. SECTION VII DESIGNATION OF BENEFICIARY Each Non-Employee Director, on becoming a Participant, shall file with the Secretary of the Corporation a Beneficiary designation on the form attached as Exhibit "C" designating one or more Beneficiaries to whom payments otherwise due the Participant shall be made in the event of his or her death. A Beneficiary designation will be effective only if the signed Beneficiary designation form is filed with the Secretary of the Corporation while the Participant is alive, and will cancel all Beneficiary designations signed and filed previously. If the primary Beneficiary shall survive the Participant but dies before receiving all the amounts due hereunder, the Deferred Amounts remaining unpaid at the time of death shall be paid in one lump sum to the legal representative of the primary Beneficiary's estate. If the primary Beneficiary shall predecease the Participant, amounts remaining unpaid at the time of the Participant's death shall be paid in the order specified by the Participant to the contingent 4 6 Beneficiary(s) surviving the Participant. If the contingent Beneficiary(s) dies before receiving all the amounts due hereunder, the unpaid amount shall be paid in one lump sum to the legal representative of such contingent Beneficiary(s) estate. If the Participant shall fail to designate a Beneficiary(s) as provided in this Section, or if all designated Beneficiaries shall predecease the Participant, the Deferred Amounts remaining unpaid at the time of such Participant's death shall be paid in one lump sum to the legal representative of the Participant's estate. SECTION VIII NONALIENATION OF BENEFITS Neither the Participant nor any Beneficiary designated by him shall have any right to, directly or indirectly, alienate, assign, or encumber any amount that is or may be payable hereunder. SECTION IX ADMINISTRATION OF PLAN Full power and authority to construe, interpret and administer the Plan shall be vested in the Corporation's Board of Directors. Decision of the Board shall be final, conclusive and binding upon all parties. SECTION X AMENDMENT OR TERMINATION OF PLAN The Board of Directors may amend or terminate this Plan at any time. Any amendment or termination of the Plan shall not affect the rights of Participants or Beneficiaries to the Deferred Amounts in existence at the time of such amendment or termination. SECTION XI APPLICABLE LAW The provisions of this Plan shall be interpreted and construed in accordance with the laws of the State of Wisconsin. SECTION XII EFFECTIVE DATE OF PLAN This Plan shall become operative and in effect on such date as shall be fixed by the Board of Directors of the Corporation. 5 7 SECTION XIII DISCRETION OF BOARD Anything to the contrary herein notwithstanding, the Board of Directors shall have the right, in its sole discretion, at any time and from time to time, to accelerate payments and make distributions to or on behalf of a Participant or a Beneficiary of a Participant then entitled to distributions from the Account of such Participant, where the Board of Directors deems such accelerated payment in the best interest of the Corporation and such distributees. 6 8 EXHIBIT "A" NOTICE OF ELECTION TO DEFER THE PAYMENT OF DIRECTORS' COMPENSATION Secretary Briggs & Stratton Corporation P.O. Box 702 Milwaukee, WI 53201 Re: Briggs & Stratton Corporation Deferred Compensation Plan For Directors Pursuant to provisions of the above-referenced Plan, I hereby elect to have Compensation payable to me for services as a Director of Briggs & Stratton Corporation deferred in the manner specified below. It is understood and agreed that this election shall become effective upon receipt of this Notice of Election by the Secretary of the Corporation. I understand that this election shall be irrevocable with respect to Compensation that has been deferred while this election is in effect. This election shall continue in effect for subsequent terms of office unless I shall modify or revoke it. Percentage of Compensation Deferred: Retainer _____% Board Meeting Fees _____% Committee Meeting Fees _____% Consent Resolution Fees _____% Account(s) to be Credited with Deferred Amounts: (a) Fixed Rate Account _____% (b) Briggs & Stratton Common Share Unit Account _____% Payment of deferred Compensation shall commence as soon as practicable in the year designated below; provided, however, that in no event shall such payments commence until at least six (6) months have elapsed since my last Compensation deferral unless payment is being made incident to my death, in which case payment shall be made as soon as practicable following the month of death. Year to Which Payment is Deferred: 19___ (no later than the year in which you attain age 71) Method of Payment: Cash deferred to be paid in: ______ Lump Sum, OR ______ Annual Installments - Number of Years, not to exceed 10. However, if an unpaid balance of deferred fees and supplemental amounts exists at the time of my death, such balance shall be paid in one lump sum to my designated Beneficiary(s) as soon as practicable immediately following my death. _____________________________________ Date____________________ Director 9 EXHIBIT "B" NOTICE OF TERMINATION Secretary Briggs & Stratton Corporation P.O. Box 702 Milwaukee, WI 53201 Re: Briggs & Stratton Corporation Deferred Compensation Plan For Directors Pursuant to provisions of the above-referenced Plan, I hereby terminate my participation in the Plan effective upon receipt of this Notice of Termination by the Secretary of the Corporation. ______________________________________ Date____________________ Director 10 EXHIBIT "C" BENEFICIARY DESIGNATION Secretary Briggs & Stratton Corporation P.O. Box 702 Milwaukee, WI 53201 Re: Briggs & Stratton Corporation Deferred Compensation Plan For Directors Any Compensation for my services as a Director of Briggs & Stratton Corporation was deferred under the above-referenced Plan and remain unpaid at my death shall be paid to the following primary Beneficiary: _____________________________________________________________ Name _____________________________________________________________ Address If the above-named primary Beneficiary shall predecease me, I designate the following persons as contingent Beneficiaries, in the order shown, to receive any such unpaid deferred fees: 1. _____________________________________________________________ Name _____________________________________________________________ Address 2. _____________________________________________________________ Name _____________________________________________________________ Address 3. _____________________________________________________________ Name _____________________________________________________________ Address This supersedes any previous Beneficiary designation made by me with respect to deferred Compensation under the Plan. I reserve the right to change the Beneficiary in accordance with the terms of the Plan. ______________________________________ Date____________________ Director Witnesses: ________________________________ ________________________________ EX-27 5 FDS
5 1 6-MOS JUN-30-1996 JUL-3-1995 DEC-31-1995 6,323,000 0 270,142,000 0 204,764,000 527,769,000 759,178,000 387,056,000 904,775,000 298,813,000 0 0 0 289,000 444,270,000 904,775,000 518,834,000 518,834,000 433,930,000 433,930,000 46,664,000 0 4,976,000 33,264,000 12,640,000 20,624,000 0 0 0 20,624,000 .71 .71
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