<PAGE> 1
SCHEDULE 14A
(Rule 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or
Rule 14a-12
BRIGGS & STRATTON CORPORATION
- - -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
BRIGGS & STRATTON CORPORATION
- - -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[ ] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
$125
------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
Pre 14A
------------------------------------------------------------------------
(3) Filing party:
Briggs & Stratton Corporation
------------------------------------------------------------------------
(4) Date filed:
8-19-94
------------------------------------------------------------------------
- - ----------------
Set forth the amount on which the filing fee is calculated and state how
it was determined.
<PAGE> 2
BRIGGS & STRATTON
CORPORATION
ANNUAL MEETING
OF SHAREHOLDERS
Wauwatosa, Wisconsin
October 19, 1994
NOTICE
AND
PROXY
STATEMENT
[RECYCLE LOGO]
PRINTED ON
RECYCLED PAPER
<PAGE> 3
BRIGGS & STRATTON CORPORATION
[LOGO]
12301 WEST WIRTH STREET
WAUWATOSA, WISCONSIN 53222
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOTICE is hereby given that the Annual Meeting of Shareholders of
BRIGGS & STRATTON CORPORATION, a Wisconsin corporation (hereinafter called the
Corporation), will be held at the Corporate Office Building, 12301 West Wirth
Street, Wauwatosa, Wisconsin 53222, on Wednesday, October 19, 1994, at 1:30
p.m. Central Daylight Time, for the following purposes:
(a) To elect three Directors to serve for three-year terms expiring
in 1997;
(b) To consider and vote upon a proposal to amend the Corporation's Articles
of Incorporation to increase the number of authorized shares of common
stock;
(c) To consider and vote upon five shareholders' proposals, if presented;
and
(d) To take action with respect to any other matters that may be brought
before the meeting and that might be considered by the shareholders of a
Wisconsin corporation at their annual meeting.
By order of the Board of Directors
Wauwatosa, Wisconsin
September 8, 1994
ROBERT H. ELDRIDGE, Secretary
YOUR VOTE IS IMPORTANT TO INSURE THAT A MAJORITY OF THE STOCK IS
REPRESENTED. PLEASE SIGN AND PROMPTLY RETURN YOUR PROXY IN THE ENCLOSED
ENVELOPE.
The Corporate Office Building is located north of the main building on
the Corporation's Wauwatosa, Wisconsin property, approximately one block east
of North 124th Street. Access to North 124th Street is easiest from West
Burleigh Street or West Capitol Drive. Proceed south on North 124th Street if
you access from West Capitol Drive and north if you access from West Burleigh
Street. Ample parking will be available in the parking lot in front of the
building.
<PAGE> 4
PROXY STATEMENT
This statement is furnished in connection with the solicitation by the
Board of Directors of Briggs & Stratton Corporation of proxies, in the
accompanying form, to be used at the Annual Meeting of Shareholders of the
Corporation to be held on October 19, 1994 and any adjournments thereof. Only
shareholders of record at the close of business on August 26, 1994 will be
entitled to notice of and to vote at the meeting. The shares represented by
each valid proxy received in time will be voted at the meeting and, if a choice
is specified on the proxy, such shares will be voted in accordance with that
specification. Shareholders may revoke proxies at any time to the extent they
have not been exercised. The cost of solicitation of proxies will be borne by
the Corporation. Solicitation will be made primarily by use of the mails;
however, some solicitation may be made by regular employees of the Corporation,
without additional compensation therefor, by telephone, by facsimile, or in
person. In addition, the Corporation has retained Georgeson & Company, Inc. to
assist it in its proxy solicitation efforts, at a fee to the Corporation
anticipated not to exceed $30,000 plus reasonable out-of-pocket
expenses. On the record date, the Corporation had outstanding 14,463,500
shares of $.01 par value common stock entitled to one vote per share.
A majority of the votes entitled to be cast with respect to each matter
submitted to the shareholders, represented either in person or by proxy, shall
constitute a quorum with respect to such matter. If a quorum exists, the
affirmative vote of a majority of the votes represented at the meeting will be
required for the election of directors, the passing of a shareholder proposal
and the approval of the proposed amendment to the Articles of Incorporation. A
vote withheld from the election of directors or an abstention with respect to
either a shareholder proposal or the proposed amendment shall count toward the
quorum requirement and shall have the effect of a vote against the director
nominee or nominees, such proposal or the proposed amendment. A broker non-vote
shall count toward the quorum requirement, but shall have no effect on the
voting for a shareholder proposal or the proposed amendment. The Inspectors of
Election appointed by the Board of Directors shall count the votes and ballots.
The Corporation's principal executive offices are located at 12301 West
Wirth Street, Wauwatosa, Wisconsin 53222. It is expected that this Proxy
Statement and the form of Proxy will be mailed to shareholders on or about
September 8, 1994.
1
<PAGE> 5
(a) ELECTION OF DIRECTORS
The Board of Directors of Briggs & Stratton is divided into three
classes, with the term of office of each class ending in successive years.
Three directors are to be elected to serve for a term of three years each
expiring in 1997 and six directors will continue to serve for the terms
designated in the following schedule. Mr. Richard E. Marceau, who had served as
director since 1988, retired from the Board in August. Mr. John S. Shiely was
elected by the Board to fill Mr. Marceau's unexpired term. Mr. Sheldon B.
Lubar, who has served as a director since 1989, has decided not to stand for
reelection. Mr. Charles I. Story has been nominated by the Board to fill the
position currently held by Mr. Lubar. Management appreciates Mr. Marceau's and
Mr. Lubar's service during a period of strategic restructuring and operational
improvement. All directors are elected subject to the Bylaw restricting service
beyond the Annual Meeting of Shareholders following their attainment of age 70.
It is intended that proxies received in response to this solicitation will be
voted for the election of the nominees named below or, in the event of
contingency not presently foreseen, for the election of other persons who may
be nominated as substitutes.
Each nonemployee director of the Corporation receives an annual
retainer fee of $12,000, a fee of $1,200 for each Board meeting attended and
$1,000 for each Committee meeting attended, and a fee of $250 for participating
in any written consent resolution. Nonemployee directors may elect to defer
receipt of all or a portion of their directors' fees until any date but no
later than the year in which the director attains the age of 71 years. Amounts
so deferred will be credited with interest quarterly at 80% of the prime rate.
Nonemployee directors are provided with $150,000 of coverage under the
Corporation's Business Travel Accident Plan while on Corporate business. Mr.
Marceau received additional compensation under a consulting agreement that
expires in December 1994, which provides for a quarterly payment of $12,000 and
coverage under the Corporation's Survivor Annuity Plan.
YEAR FIRST
NAME, AGE, PRINCIPAL OCCUPATION FOR PAST FIVE YEARS BECAME A
AND DIRECTORSHIPS DIRECTOR
- - --------------------------------------------------- ----------
Nominees for election at the Annual Meeting (Class of 1997):
JOHN L. MURRAY, 67 (1) (2) 1989
Retired. Chairman of the Board of Universal Foods Corporation,
manufacturer and marketer of food ingredients and specialty
foods (1984-1990) and Chief Executive Officer (1984-1988).
Director of Marcus Corporation, Twin Disc, Incorporated,
Wisconsin Energy Corporation, Universal Foods Corporation
and Wisconsin Electric Power Company.
JOHN S. SHIELY, 42 1994
President and Chief Operating Officer of the Corporation since
August 1994. Executive Vice President - Administration
(1991-1994); Vice President and General Counsel (1990-1991) and
General Counsel (1986-1990).
CHARLES I. STORY, 40 Nominee
President and Chief Executive Officer, INROADS, Inc., a national
non-profit training and development organization which prepares
talented minorities for careers in business and engineering;
Executive Vice President - Operations from July 1991 to December
1992. Vice President and Director of Community Development, First
American National Bank (1989-1991).
2
<PAGE> 6
YEAR FIRST
NAME, AGE, PRINCIPAL OCCUPATION FOR PAST FIVE YEARS BECAME A
AND DIRECTORSHIPS DIRECTOR
- - --------------------------------------------------- ----------
INCUMBENT DIRECTORS (CLASS OF 1996):
MICHAEL E. BATTEN, 54 (1) (2) 1984
Chairman and Chief Executive Officer of Twin Disc, Incorporated,
manufacturer of power transmission equipment, since 1991;
Chairman, President and Chief Executive Officer (1989-1991).
Director of Firstar Corporation, Twin Disc, Incorporated and
Universal Foods Corporation.
ROBERT H. ELDRIDGE, 55 1988
Secretary-Treasurer of the Corporation since 1984. Director of
M&I Northern Bank.
PETER A. GEORGESCU, 55 (1) (4) 1986
President and Chief Executive Officer of Young & Rubicam Inc.,
an international communications firm; President since 1990 and
Chief Executive Officer since January 1994. President of Young
& Rubicam Advertising, a subsidiary, from 1986 to 1990. Director
of Young & Rubicam Inc.
Incumbent Directors (Class of 1995):
CLARENCE B. ROGERS, JR., 64 (1) (4) 1991
Chairman and Chief Executive Officer of Equifax Inc., a provider
of information based administrative services, since 1992;
President and Chief Executive Officer, October 1989 to October
1992; President, October 1987 to October 1989. Director of Dean
Witter, Discover & Co.; Sears, Roebuck & Co.; MCI Communications
Corp. and Equifax Inc.
FREDERICK P. STRATTON, JR., 55 (3) (4) 1976
Chairman and Chief Executive Officer of the Corporation since
1986. Also President (1992-1994); Director of Banc One Corporation,
Banc One Wisconsin Corporation, Bank One Milwaukee, N.A., Midwest
Express Airlines, Weyco Group Inc., Wisconsin Electric Power
Company and Wisconsin Energy Corporation.
ELWIN J. ZARWELL, 67 (3) (5) 1972
Lawyer, Partner in the firm of Quarles & Brady, Milwaukee,
Wisconsin. Director of Mid-City Foundry Co. and The Mutual
Group (U.S.) Inc.
Footnotes (1), (2), (3), (4) and (5) are on page 4.
3
<PAGE> 7
(1) Member of Audit Committee, of which Mr. Batten is Chairman. The Audit
Committee, composed of all outside directors, makes recommendations to
the Board of Directors regarding the engagement of independent public
accountants to audit the books and accounts of the Corporation and
reviews with such accountants the audited financial statements and their
report thereon. The Audit Committee also reviews and approves all
non-audit services performed by the independent public accountants,
reviews such accountants' recommendations on accounting policies and
internal controls, reviews internal accounting and auditing procedures,
and monitors internal programs to insure compliance with law and to avoid
conflicts of interest. The Audit Committee held three meetings during
fiscal 1994.
(2) Member of Nominating and Salaried Personnel Committee, a committee
composed of all outside directors, of which Mr. Murray is Chairman. The
Nominating and Salaried Personnel Committee: (a) proposes to the Board of
Directors a slate of nominees for election by the shareholders at the
Annual Meeting of Shareholders and prospective director candidates in the
event of the resignation, death or retirement of directors or change in
Board composition requirements; (b) reviews candidates recommended by
shareholders for election to the Board of Directors; (c) develops plans
regarding the size and composition of both the Board of Directors and
Committees; (d) reviews the compensation and benefits of salaried
employees and makes appropriate recommendations to the Board of
Directors; (e) administers The Briggs & Stratton Corporation Stock
Incentive Plan and the Economic Value Added Incentive Compensation Plan;
and (f) prepares on an annual basis a report on executive compensation.
The Nominating and Salaried Personnel Committee held two meetings during
fiscal 1994.
The Committee will consider candidates for the Board of Directors
recommended by a shareholder who submits such recommendation in writing
to the Secretary of the Corporation at its principal office in Wauwatosa,
Wisconsin, stating the shareholder's name and address, the name and
address of the candidate, and the qualifications of and other detailed
background information regarding the candidate. All letters suggesting
candidates should be received by the Secretary of the Corporation on or
before May 1 of the year of the Annual Meeting of Shareholders in which
the candidate's nomination would be acted upon.
Any direct nominations by shareholders for the Board of Directors must
be made in accordance with the information and timely notice requirements
of the Corporation's Bylaws, a copy of which may be obtained from the
Secretary of the Corporation. Such nominations must be in writing and,
for consideration at the 1995 Annual Meeting, received by the Secretary
no later than July 21, 1995.
(3) Member of Executive Committee. The Executive Committee is authorized
to exercise the authority of the Board of Directors in the management
of the business and the affairs of the Corporation between meetings of
the Board, except as provided in the Bylaws. The Executive Committee held
one meeting during fiscal 1994.
(4) Member of Planning Committee, of which Mr. Stratton is Chairman. This
Committee reviews with management the product and marketing plans for
the Corporation. There were five meetings held during fiscal 1994.
(5) Quarles & Brady, of which Mr. Zarwell is a partner, is outside legal
counsel for the Corporation.
The Board of Directors held five meetings in fiscal 1994.
4
<PAGE> 8
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table presents the names of persons known to the
Corporation to be the beneficial owners of more than 5% of the outstanding
shares of its common stock.
<TABLE>
<CAPTION>
- - --------------------------------------------------------------------------------
Name and Address of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership Class
- - --------------------------------------------------------------------------------
<S> <C> <C>
FMR Corp. 1,178,822 (a) 8.2%
82 Devonshire Street
Boston, Massachusetts 02109
Pioneering Management Corp. 1,314,700 (b) 9.1%
60 State Street
Boston, Massachusetts 02109
- - --------------------------------------------------------------------------------
</TABLE>
(a) FMR Corp. reports that as of August 8, 1994 the amount beneficially
owned included 1,155,717 shares beneficially owned by Fidelity Management &
Research Company, as a result of its serving as investment adviser to various
investment companies registered under Section 8 of the Investment Company Act
of 1940; and 12,505 shares beneficially owned by Fidelity Management Trust
Company, as a result of its serving as trustee or managing agent for various
private investment accounts, primarily employee benefit plans; and 10,600
shares beneficially owned by Fidelity International Limited, as a result of its
serving as investment adviser to various non-U.S. investment companies. FMR has
sole voting power with respect to 12,505 shares and sole dispositive power with
respect to 1,168,222 shares. Fidelity International Limited has sole voting and
dispositive power with respect to all the shares it beneficially owns.
(b) Pioneering Management Corp. reports that as of July 31, 1994 it had
sole voting power with respect to 1,314,700 shares, sole dispositive power with
respect to 62,000 shares and shared dispositive power with respect to 1,252,700
shares.
The above beneficial ownership information is based on information
furnished by the specified persons and is determined in accordance with Rule
13d-3, as required for purposes of this Proxy Statement. It is not necessarily
to be construed as an admission of beneficial ownership for other purposes.
5
<PAGE> 9
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information regarding the beneficial
ownership of shares of common stock of the Corporation by each director,
nominee and named executive officer, and by all directors and executive
officers as a group, as of August 16, 1994.
<TABLE>
<CAPTION>
Nature of Beneficial Ownership
------------------------------------------
Total No. Sole Shared Sole
of Shares Percent Voting and Voting and Voting
Beneficially of Investment Investment Power
Directors and Executive Officers Owned Class Power Power Only
- - -------------------------------- ------------ ------- ---------- ----------- ------
<S> <C> <C> <C> <C> <C>
Michael E. Batten 200 * 200 0 0
Robert H. Eldridge 90,504 (a) * 1,500 87,100 1,904
Peter A. Georgescu 750 * 0 750 0
Michael D. Hamilton 2,819 * 1,500 0 1,319
Sheldon B. Lubar 1,200 * 1,200 0 0
John L. Murray 1,000 * 1,000 0 0
Clarence B. Rogers, Jr. 1,000 * 1,000 0 0
John S. Shiely 146,984 (b) 1.0 6,109 140,000 875
Charles I. Story 200 * 0 200 0
Frederick P. Stratton, Jr. 390,922 (a) (b) 2.7 6,672 381,686 2,564
James A. Wier 3,185 * 1,546 0 1,639
Elwin J. Zarwell 2,000 * 2,000 0 0
All directors, nominees and
officers as a group (21 persons
including the above named) 529,631 3.7% 99,833 413,365 16,433
</TABLE>
*Less than 1%.
(a) Includes 87,100 shares in the Briggs & Stratton Retirement Plan as to
which Mr. Stratton and Mr. Eldridge share beneficial ownership through
joint voting and investment power.
(b) Includes 140,000 shares in the Briggs & Stratton Corporation Foundation
as to which Mr. Stratton and Mr. Shiely share beneficial ownership
through joint voting and investment power.
The above beneficial ownership information is based on information
furnished by the specified persons and is determined in accordance with Rule
13d-3, as required for purposes of this Proxy Statement. It is not necessarily
to be construed as an admission of beneficial ownership for other purposes.
6
<PAGE> 10
PERFORMANCE GRAPH
The chart below shows a comparison of the cumulative return over the last five
fiscal years had $100 been invested at the close of business on June 30, 1989
in each of Briggs & Stratton common stock, the Standard & Poor's (S&P) 500
Index and the S&P Machinery Index.
FIVE YEAR CUMULATIVE TOTAL RETURN COMPARISON*
BRIGGS & STRATTON VERSUS PUBLISHED INDICES (S&P 500 AND S&P MACHINERY)
[GRAPH]
<TABLE>
<CAPTION>
6/89 6/90 6/91 6/92 6/93 6/94
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
<> Briggs & Stratton 100 132 139 197 300 456
[] S&P 500 100 113 122 137 157 180
x S&P Machinery 100 120 115 112 151 202
</TABLE>
* Total return calculation is based on compounded monthly returns with
reinvested dividends.
NOMINATING AND SALARIED PERSONNEL COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The Corporation's Nominating and Salaried Personnel Committee (the
"Committee"), which is comprised of three outside directors of the Corporation,
is responsible for considering and approving compensation arrangements for
senior management of the Corporation, including the Corporation's executive
officers and the chief executive officer. The objectives of the Committee in
establishing compensation arrangements for senior management are to: (i) attract
and retain key executives who are important to the continued success of the
Corporation and its operating divisions; and (ii) provide strong financial
incentives, at reasonable cost to the shareholders, for senior management to
enhance the value of the shareholders' investment.
The primary components of the Corporation's executive compensation
program are (i) base salary, (ii) incentive compensation bonuses and (iii)
incentive stock options.
The Committee believes that:
- The Corporation's incentive plans provide very strong incentives for
management to increase shareholder value;
- The Corporation's pay levels are appropriately targeted to attract
and retain key executives; and
- The Corporation's total compensation program is a cost-effective
strategy to increase shareholder value.
7
<PAGE> 11
BASE SALARIES
Officers' base salaries are reviewed annually by the Committee. Salaries
are based on level of responsibility and individual performance. It is the
Corporation's objective that base salary levels, in the aggregate, be at or
modestly above competitive salary levels. The Committee defines a competitive
salary level as the average for similar responsibilities in similar companies.
In setting base salaries for fiscal 1994, the Committee reviewed compensation
survey data for metal fabricating industries and was satisfied that the salary
levels set would achieve the Corporation's objective. In fiscal 1994, Mr.
Stratton received an increase in base salary of 3.7%.
INCENTIVE BONUSES
The Corporation maintains an Economic Value Added ("EVA") Incentive
Compensation Plan (the "Plan", or "EVA Plan"), the purpose of which is to
provide incentive compensation to certain key employees, including all executive
officers, in a form which relates the financial reward to an increase in the
value of the corporation to its shareholders. In general, EVA is the net
operating profit after taxes, less a capital charge. The capital charge is
intended to represent the return expected by the providers of the firm's
capital, and is the weighted average cost of (i) equity capital based on a
30-year Treasury Bond yield plus the product of the average equity risk premium
and the business risk index for the Corporation, and (ii) debt capital equal to
actual after-tax debt cost. EVA improvement is the financial performance measure
most closely correlated with increases in shareholder value.
Under the EVA Plan, the Accrued Bonus for a participant for any fiscal
year is equal to the aggregate of 50% of the Company Performance calculation
(Base Salary X Target Incentive Award X Company Performance Factor) plus 50% of
the Individual Performance calculation (Base Salary X Target Incentive Award X
Individual Performance Factor). The intent of the Plan is to reward executives
based on their ability to continuously improve the amount of EVA earned on
behalf of shareholders. For all of the executives named in the Summary
Compensation Table, the Committee determined that the Individual Performance
Factor would be the same as the Company Performance Factor. Individual target
incentive awards under the Plan ranged from 20% to 80% of compensation for
fiscal 1994. For the same year, Mr. Stratton's individual target incentive
award was 80%. His fiscal 1994 bonus reflects a payout of 148% of his target
incentive award.
The Company Performance Factor is determined by reference to the amount
of improvement or deterioration in EVA. If the annual improvement in EVA is in
excess of the targeted improvement, the Company Performance calculation will
produce an amount in excess of the Target Incentive Award; if the annual
improvement in EVA is less than the targeted improvement, the Company
Performance calculation will produce an amount less than the Target Incentive
Award. There is no cap and no floor on the accrued bonus. For fiscal 1994, the
Target EVA was the Actual EVA for fiscal 1993 plus Expected Improvement. For
subsequent Plan years, the target EVA will be the average of the Target EVA and
Actual EVA for the prior Plan year plus an Expected Improvement. Expected
Improvement for each fiscal year is $4 million.
The Individual Performance Factor is determined by the executive to whom
the participant reports, subject to approval by the Committee, and is the
average (or weighted average) of one or more quantifiable or non-quantifiable
factors (called "Supporting Performance Factors"). Supporting Performance
Factors represent an achievement percentage continuum that ranges from 50% to
150% of the individual target award opportunity, and will be enumerated from .5
to 1.5 based on such continuum.
8
<PAGE> 12
However, if approved by the Committee, Supporting Performance Factors which are
the same as the Company Performance Factor or are based on divisional EVA may
be unlimited.
The EVA bonus plan provides the powerful incentive of an uncapped bonus
opportunity, but also uses a "Bonus Bank" feature to ensure that extraordinary
EVA improvements are sustained before extraordinary bonus awards are paid out.
The Bonus Bank feature applies to those participants determined by the Committee
to be Senior Executives under the Plan. All of the executive officers, including
those named in the Summary Compensation Table, were designated Senior Executives
for fiscal 1994. Each year, any accrued bonus in excess of 125% of the target
bonus award is added to the outstanding Bonus Bank balance. The bonus paid is
equal to the accrued bonus for the year, up to a maximum of 125% of the target
bonus, plus 33% of the Bonus Bank balance at the end of the year. Thus,
extraordinary EVA improvements must be sustained for several years to ensure
full payout of the accrued bonus. A Bonus Bank account is considered "at risk"
in the sense that in any year the accrued bonus is negative, the negative bonus
amount is subtracted from the outstanding Bonus Bank balance. In the event the
outstanding Bonus Bank balance at the beginning of the year is negative, the
bonus paid is limited to the accrued bonus up to a maximum of 75% of the target
bonus. The executive is not expected to repay negative balances. On termination
of employment due to death, disability or retirement, the Available Balance in
the Bonus Bank will be paid to the terminating executive or his designated
beneficiary or estate. Executives who voluntarily leave to accept employment
elsewhere or who are terminated for cause will forfeit any positive Available
Balance.
STOCK INCENTIVE PLAN
In 1990, the shareholders approved the Corporation's Stock Incentive
Plan ("Incentive Plan"). The Incentive Plan authorizes the Committee to grant to
officers and other key employees stock incentive awards in the form of one or
any combination of the following: stock options, stock appreciation rights,
deferred stock, restricted stock and stock purchase rights. In early 1993, the
Committee hired Stern Stewart & Co. as its compensation consultant to review
and, if appropriate, recommend changes in executive compensation methods. The
Committee worked with its consultant to adopt a method of granting options which
more closely aligns financial reward to optionees to the long-term performance
of the Corporation.
The Committee determined that for a five year period, beginning in
fiscal 1994, the sole form of options to be granted under the Incentive Plan
would be leveraged stock options (LSOs), and therefore an amendment to the
Incentive Plan increasing the number of shares available for LSO grants was
submitted to shareholders and approved at the October 1993 Annual Meeting.
Effective for fiscal 1994, an amount equal to the annual Total Bonus Payout
under the EVA Plan will be awarded in the form of LSOs, which can be either
Incentive Stock Options or Non-Qualified Stock Options under the Stock Option
part of the Incentive Plan. All options granted have a term of 5 years and
become exercisable at the end of three years.
On August 12, 1994, after publication of financial results for fiscal
1994, the Committee granted leveraged stock options (LSOs) to 16 Senior
Executives, including all executive officers shown in the Summary Compensation
Table, based on the amount of incentive bonus under EVA earned for fiscal 1994.
The calculation of the number of options granted to each executive, and the
method of determining their exercise price, is described below. These Leveraged
Stock Options provide a form of option grant that simulates a stock purchase
with 10:1 leverage. Because the leveraged options granted in 1994 have
9
<PAGE> 13
a premium exercise price and a term of five years, the current Black-Scholes
value of these options is only 16.0% of the stock price. The number of
leveraged options granted to Mr. Stratton for fiscal 1994 was determined in the
manner described and was based on his incentive bonus for fiscal 1994.
The number of LSOs granted to a Senior Executive is determined by
dividing the Total Bonus Payout by 10% of the fair market value (FMV) of the
Corporation stock on the date of grant. The exercise price of the option is the
product of 90% of the FMV on the date of grant times the Estimated Annual Growth
Rate compounded over the five year term of the option. The Estimated Annual
Growth Rate equals the 30-year U.S. Government Bond interest rate for April of
the immediately preceding plan year, plus 1%.
The following example illustrates the calculation of the stock option
grant for a Senior Executive who is entitled to $50,000 in Total Bonus Payout
under the EVA Plan. The number of options earned is calculated by dividing the
Total Bonus Payout by 10% of the FMV of Corporation stock. Assume the FMV of
Corporation stock on the date of grant is $75.125.
Example: Number of Options Granted
10% of the FMV is $7.5125.
Options Granted is 6,656 ($50,000/$7.5125)
Exercise Price = (.9 x FMV) x (1 + Estimated Annual Growth Rate)(5)
7.85% Estimated Annual Growth Rate (6.85%, plus 1%)
The exercise price is $98.66 (.9 x $75.125 x 1.0785)(5)
Thus, the fair market value of the Corporation shares must exceed $98.66
between 3 and 5 years from the date of LSO grant to give the LSO options value
to the Senior Executives, based on this example.
The maximum number of LSOs to be granted each year is 300,000, and the
maximum number of LSOs that may be granted cumulatively under the LSO Program is
1,250,000. If the Total Bonus Payout under EVA produces more than 300,000 LSOs
in any year, LSOs granted to all Senior Executives for that year will be reduced
pro-rata based on proportionate Total Bonus Payouts under the EVA Plan. The
amount of any such reduction shall be carried forward to subsequent years and
invested in LSOs to the extent the annual limitation is not exceeded in such
years. The LSO Program is intended to exist for a five-year period.
Internal Revenue Service regulations effective for fiscal years
beginning after January 1994, limit the deductibility by a corporation of
compensation paid to the Chief Executive Officer and the other executive
officers whose compensation is required to be reported in the Summary
Compensation Table to $1 million unless certain conditions are met. After
careful consideration of the options for maintaining the deductibility of
compensation earned in excess of the $1 million cap by any of the covered
executives, the Committee recommended to the Board adoption of a resolution
requiring any corporate officer whose compensation might be expected to exceed
the cap to enter into a Deferred Compensation Agreement for fiscal 1995. Mr.
Stratton has entered into such an Agreement, under which he has deferred any
amounts earned in excess of the cap to the fiscal year following the year in
which he leaves the employment of the Corporation.
NOMINATING AND SALARIED PERSONNEL COMMITTEE:
John L. Murray, Chairman
Michael E. Batten
Sheldon B. Lubar
10
<PAGE> 14
EXECUTIVE COMPENSATION
Cash Compensation
The table which follows sets forth certain information for each of the
last three fiscal years concerning the compensation paid by the Corporation to
the Corporation's Chief Executive Officer and the four other most highly
compensated executive officers (collectively, the "named executive officers"):
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
-------------
Awards
Annual -------
Compensation (1) Securities
Name and Fiscal ---------------- Underlying All Other
Principal Position Year Salary ($) Bonus ($) Options/SARs (#) (2) Compensation ($) (3)
- - ---------------------- --------- ---------- --------- -------------------- --------------------
<S> <C> <C> <C> <C> <C>
F.P. Stratton 1994 $494,400 $584,460 77,800 $6,884
Chairman and 1993 476,736 254,577 32,120 6,667
Chief Executive Officer 1992 467,472 86,224 9,000
M.D. Hamilton 1994 253,416 187,236 24,920 6,373
Executive Vice President - 1993 243,672 86,747 10,950 6,175
Sales & Service 1992 233,184 43,011 9,000
J.A. Wier 1994 253,416 187,236 24,920 6,207
Executive Vice President - 1993 243,672 86,747 10,950 6,016
Operations 1992 233,184 43,011 9,000
J.S. Shiely (4) 1994 231,744 171,224 22,790 5,184
Executive Vice President - 1993 222,504 79,211 10,000 4,576
Administration 1992 182,010 33,571 9,000
R.H. Eldridge 1994 213,912 158,049 21,040 7,072
Secretary-Treasurer 1993 205,680 73,222 9,240 6,864
1992 195,888 27,098 9,000
</TABLE>
(1) Includes amounts earned in fiscal year, whether or not deferred.
(2) No SARs are outstanding. Option awards reported for fiscal 1994 were
granted August 12, 1994 based on executive performance for fiscal 1994.
(3) All other compensation for fiscal 1994 for Messrs. Stratton, Hamilton,
Wier, Shiely and Eldridge, respectively, includes: (i) matching
contributions to the Corporation's Savings and Investment Plan for each
named executive officer of $4,620, $4,643, $4,643, $4,636 and $4,620, and
(ii) the cost of Survivor Annuity Plan coverage for each named executive
officer of $2,264, $1,730, $1,564, $548 and $2,452.
In accordance with SEC transitional rules, amounts have not been
included for fiscal 1992.
(4) Mr. Shiely was elected President and Chief Operating Officer in August
1994.
11
<PAGE> 15
STOCK OPTIONS
The Stock Incentive Plan approved by shareholders provides for the
granting of stock options with respect to Common Stock.
The following tables set forth further information relating to stock
options:
OPTION/SAR GRANTS FOR LAST FISCAL YEAR*
<TABLE>
<CAPTION>
Grant Date
Individual Grants Value
- - ----------------------------------------------------------------------------------------------------------------
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise or Grant Date
Options/SARs Employees in Base Price Expiration Present
Name Granted (#) Fiscal Year ($ / Sh) Date Value $ **
- - ---- ------------- ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
F.P. Stratton........ 77,800 28.2% $98.66 8/12/99 $937,234
M.D. Hamilton........ 24,920 9.0% 98.66 8/12/99 300,204
J.A. Wier............ 24,920 9.0% 98.66 8/12/99 300,204
J.S. Shiely.......... 22,790 8.3% 98.66 8/12/99 274,545
R.H. Eldridge........ 21,040 7.6% 98.66 8/12/99 253,463
</TABLE>
* Option awards reported for fiscal 1994 were granted August 12, 1994 based
on executive performance for fiscal 1994. No SARs were granted.
** Notes:
Black-Scholes values are based on the following assumptions:
Stock price at date of grant = 75.125
Option term = 5 years
Risk-free interest rate = .0695
Volatility = .250
Dividend yield = .030
Risk-free interest rate is the five year U.S. government bond yield
on the date of grant. Volatility and yield assumptions are based on
monthly price and dividend data for the 36 months
ending 6/30/94
It should not be concluded that the Corporation supports the validity
of the Black-Scholes method or that the values shown in the table as generated
by the model represent the amounts an executive might earn upon exercise of the
options.
The methodology used in determining the number of grants awarded and
other terms and conditions of the grants are found in the Nominating and
Salaried Personnel Committee Report on Executive Compensation.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES*
<TABLE>
<CAPTION>
Number of Securities Value of
Underlying Unexercised Unexercised In-the-Money
Options/SARs Options/SARs
Shares Acquired Value at Fiscal Year End (#) at Fiscal Year End ($)
Name on Exercise (#) Realized ($) (Exercisable/Unexercisable) (Exercisable/Unexercisable)
- - ---- ----------------- ------------- ---------------------------- ----------------------------
<S> <C> <C> <C> <C>
F.P. Stratton...... 1,500 84,375 0 / 126,420 0 / 450,938
M.D. Hamilton...... 1,300 71,419 200 / 52,370 7,700 / 450,938
J.A. Wier.......... 1,500 80,625 0 / 52,370 0 / 450,938
J.S. Shiely........ 0 0 750 / 46,540 28,875 / 351,563
R.H. Eldridge...... 0 0 1,500 / 46,780 57,750 / 450,938
</TABLE>
* No SARs are outstanding. Options at fiscal year end include options
granted August 12, 1994 based on executive performance in fiscal 1994.
12
<PAGE> 16
LONG-TERM INCENTIVE COMPENSATION
As described in more detail in the Nominating and Salaried Personnel
Committee Report on Executive Compensation, the EVA Plan requires that accrued
bonuses payable to Senior Executives in excess of 125% of their target bonus be
banked and remain at risk. The amounts of banked contingent incentive
compensation awarded to the named executive officers for fiscal 1994 are as
follows:
Long-Term Incentive Plans - Awards in Last Fiscal Year
<TABLE>
<CAPTION>
Estimated Future Payouts Under Non-Stock
Price-Based Plans
-----------------------------------------
Name Amounts Banked ($) Minimum ($) Maximum ($)
- - ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
F.P. Stratton, Jr. $182,849 0 $182,849
M.D. Hamilton 58,577 0 58,577
J.A. Wier 58,577 0 58,577
J.S. Shiely 53,568 0 53,568
R.H. Eldridge 49,446 0 49,446
</TABLE>
RETIREMENT PLAN
The Corporation maintains a defined benefit retirement plan (the
"Retirement Plan") covering all executive officers and substantially all other
employees. Under the Retirement Plan non-bargaining unit employees receive an
annual pension payable on a monthly basis at retirement equal to 1.6% of the
employee's average of the highest five years' compensation of the last ten
calendar years of service prior to retirement multiplied by the number of years
of credited service, with an offset of 50% of Social Security (prorated if
years of credited service are less than 30). Compensation under the Retirement
Plan includes the compensation shown in the Summary Compensation Table under
the headings "Salary" and "Bonus," subject to a maximum compensation set by law
($150,000 in 1994).
Executive officers participate in an unfunded program which supplements
benefits under the Retirement Plan. Under this program executive officers are
provided with additional increments of 0.50 of 1% of compensation per year of
credited service over that presently payable under the Retirement Plan to
non-bargaining unit employees.
In no event can a pension paid under the above described plans to a
non-bargaining unit employee exceed 70% of the employee's average monthly
compensation.
A trust has been established for deposit of the aggregate present value
of the benefits described above for executive officers upon the occurrence of a
change in control of the Corporation, which trust would not be considered
funding the benefits for tax purposes.
13
<PAGE> 17
The following table shows total estimated annual benefits payable from
funded and unfunded sources to executive officers upon normal retirement at age
65 at specified compensation and years of service classifications calculated on
a single-life basis and adjusted for the projected Social Security offset:
<TABLE>
<CAPTION>
Annual Pension Payable for Life
Average Annual Compensation After Specified Years of Credited Service
in Highest 5 of Last 10 -----------------------------------------
Calendar Years of Service 10 Years 20 Years 30 Years 40 Years
-------------------------- --------- ---------- -------- ---------
<S> <C> <C> <C> <C>
$ 200,000 $ 40,000 $ 80,000 $120,000 $140,000*
400,000 82,000 164,000 246,000 280,000*
600,000 124,000 248,000 372,000 420,000*
800,000 166,000 332,000 498,000 560,000*
1,000,000 208,000 416,000 624,000 700,000*
1,200,000 250,000 500,000 750,000 840,000*
1,400,000 292,000 584,000 876,000 980,000*
</TABLE>
* Figures reduced to reflect the maximum limitation of 70% of compensation.
The above table does not reflect limitations imposed by the Internal
Revenue Code of 1986, as amended (the "Code"), on pensions paid under federal
income tax qualified plans. However, an executive officer covered by the
Corporation's unfunded program will receive the full pension to which he would
be entitled in the absence of such limitations.
The years of credited service under the Retirement Plan for the
individuals named in the Summary Compensation Table are: Mr. Stratton - 21; Mr.
Hamilton - 18; Mr. Wier - 19; Mr. Shiely - 8 and Mr. Eldridge - 28.
EMPLOYMENT AGREEMENTS
All executive officers of the Corporation, including the named
executive officers, have signed a two-year employment agreement, with a
one-year automatic extension upon each anniversary date, unless either party
gives 30-days' notice that the agreement will not be further extended. Under
the agreement, the officer agrees to perform the duties currently being
performed in addition to other duties that may be assigned from time to time.
The Corporation agrees to pay the officer a salary of not less than that of the
previous year and to provide fringe benefits that are provided to all other
salaried employees of the Corporation in comparable positions.
CHANGE OF CONTROL EMPLOYMENT AGREEMENTS
The Board of Directors has authorized the Chairman of the Board to
offer to all executive officers and to certain other key employees change in
control employment agreements which ensure the employee's continued employment
following a "change in control" on a basis equivalent to the employee's
employment immediately prior to such change in terms of position, duties,
compensation and benefits, as well as specified payments upon termination
following a change in control. The Corporation currently has such agreements
with 15 executive officers and key employees of the Corporation, including all
of the executive officers named in the Summary Compensation Table. Such
agreements become effective only upon a defined change in control of the
Corporation, or if the employee's employment is terminated upon
14
<PAGE> 18
or in anticipation of such a change in control, and automatically
supersede any existing employment agreement. Under the agreements, if during
the employment term (three years from the change in control) the employee is
terminated other than for "cause" or if the employee voluntarily terminates his
employment for good reason or during a 30-day window period one year after a
change in control, the employee is entitled to specified severance benefits,
including a lump sum payment of three times the sum of the employee's annual
salary and bonus and a "gross-up" payment which will, in general, effectively
reimburse the employee for any amounts paid under Federal excise taxes.
(b) APPROVAL OF AN AMENDMENT TO THE ARTICLES OF INCORPORATION TO INCREASE THE
AUTHORIZED COMMON STOCK OF THE CORPORATION
The Board of Directors has adopted resolutions declaring a two-for-one
stock split of the Corporation's outstanding Common Stock (the "Stock Split")
contingent upon shareholder approval of the amendment to the Corporation's
Articles of Incorporation described below. The Board also declared it advisable
and in the best interest of the shareholders that the shareholders approve the
action called for by the following resolution and, accordingly, directed that
the resolution be submitted for approval by the shareholders at the
Corporation's Annual Meeting of Shareholders, intended to be effective as of
the close of business on October 31, 1994.
"Resolved, that Article III of the Corporation's Articles of
Incorporation, entitled `Capital Stock,' be amended to read in its entirety as
follows:
The aggregate number of shares which the corporation shall have
authority to issue is Sixty Million (60,000,000) shares, consisting of
one class only, designated as `Common Stock,' of the par value of One
Cent ($0.01) per share."
Before the amendment can become effective, shareholders must approve
Proposal (b) by the affirmative vote of the holders of a majority of the votes
represented at the meeting.
Without the amendment, the Corporation does not have a sufficient
number of authorized shares of Common Stock to permit the Stock Split. Of the
30,000,000 currently authorized shares of Common Stock, as of August 26, 1994,
14,463,500 shares were issued, 7,231,750 were reserved for issuance under the
Corporation's shareholder rights plan and 1,628,092 were reserved for issuance
under the Corporation's stock incentive plan. The increase in the authorized
Common Stock would permit the Stock Split and would allow the remaining
unissued shares to be used at some future date, without further shareholder
action, for additional stock splits or dividends, or for other proper corporate
purposes. However, the Corporation presently has no plans to issue any shares
other than as required for the Stock Split and as may be required in connection
with the stock incentive plan or the shareholder rights agreement.
If the amendment is approved, as of the effective date of the Stock
Split, appropriate adjustments will be made in the number and price of shares
reserved for issuance under the stock incentive plan and the shareholder rights
agreement.
15
<PAGE> 19
If the amendment is approved, the Corporation proposes to cause it to
become effective at the close of business on October 31,1994 by filing the
amendment in the Office of the Secretary of State of the State of Wisconsin.
As soon as practicable, there will be mailed to each shareholder of
record as of the close of business on the date the amendment becomes effective
a certificate or certificates for the additional shares.
Certificates representing shares issued prior to the time the amendment
becomes effective will continue to represent the same number of shares of the
Corporation's stock as they did prior to the time the amendment becomes
effective, and will after that time represent, in addition, the right to
receive certificates for an equal amount of shares as a result of the Stock
Split. Shareholders should not destroy their certificates, nor should they mail
them to the Corporation or its transfer agent. Existing certificates and the
certificate or certificates for additional shares to be mailed to shareholders
as a result of the Stock Split will represent the total shares owned after the
amendment becomes effective.
The Corporation has been advised by outside legal counsel that, in
their opinion, the Stock Split will not result in any taxable income or in any
gain or loss to shareholders for U.S. federal income tax purposes. Immediately
after the Stock Split, the tax basis of each share of Common Stock will be
one-half of the tax basis before the Stock Split. For tax purposes, each new
share will be deemed to have been acquired at the same time as the original
share with respect to which the new share was issued.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL (B).
16
<PAGE> 20
(c) SHAREHOLDER PROPOSALS
Information regarding five shareholder proposals is set forth below.
Briggs & Stratton Corporation disclaims any responsibility for the content of
each proposal and statement of support, which are presented as received from
the shareholders. Under the Corporation's Articles of Incorporation, the
affirmative vote of the holders of a majority of the votes represented, in
person or by proxy, at a meeting at which a quorum is present is necessary to
adopt each proposal. As noted below, each shareholder proponent is affiliated
with the United Paperworkers International Union Local 7232 (the "Union"),
which is involved in a corporate campaign against the Corporation. Management
believes that shareholders' support of these proposals will encourage and
prolong the effort by the Union to use corporate governance and other corporate
campaign tactics to harass and pressure the Corporation into entering into
labor agreements that are contrary to the interest of the Corporation's
shareholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE AGAINST EACH OF THESE
FIVE PROPOSALS.
SHAREHOLDER PROPOSAL #1
Ms. Victoria A. Black, S87 W22455 Edgewood Avenue, Big Bend, Wisconsin,
who has indicated that she holds 15 shares of common stock of the Corporation,
has given notice of her intention to present the following proposal for action
at the Annual Meeting:
BE IT RESOLVED: That the stockholders of Briggs & Stratton Corporation
("Company") urge that the Board of Directors take the necessary steps, in
compliance with Wisconsin state law, to declassify the Board of Directors for
the purpose of director elections. The Board declassification shall be done in
a manner that does not affect the unexpired terms of directors previously
elected.
PROPONENT'S STATEMENT IN SUPPORT OF SHAREHOLDER PROPOSAL #1
The Board of Directors of the Company is divided into three classes
serving staggered three-year terms. I believe that the classification of the
Board of Directors is not in the best interest of the Company and its
shareholders. The elimination of the staggered board would require each
director to stand for election annually. This procedure would allow
shareholders an opportunity to annually register their views on the performance
of the board collectively and each director individually. Concern that the
annual election of all directors would leave the Company without experienced
board members in the event that all incumbents are voted out is unfounded. If
the owners should choose to replace the entire board, it would be obvious that
the incumbent directors' contributions were not valued.
I believe that a company's corporate governance procedures and
practices, and the level of management accountability they impose, are related
to the financial performance of the company. I believe sound corporate
governance practices, such as the annual election of all directors, will impose
the level of management accountability necessary to help ensure that a good
performance record continues over the long-term.
A classified board of directors protects the incumbency of the board of
directors and current management which in turn limits accountability to
stockholders. I believe that this protection for
17
<PAGE> 21
incumbents reduces management's accountability to shareholders and negatively
impacts financial performance.
I urge your support for this proposal.
DIRECTORS' STATEMENT IN OPPOSITION TO SHAREHOLDER PROPOSAL #1
As a point of information, the Board notes that Ms. Victoria A. Black
is a Trustee and Steward for Local 7232 of the United Paperworkers
International Union, which is involved in a corporate campaign against the
Corporation.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE AGAINST THE FOREGOING
SHAREHOLDER PROPOSAL FOR THE FOLLOWING REASONS:
The Corporation has had a staggered board for many years, and it has
worked well. In 1992, shareholders again authorized the use of a classified
board by approving a change in the state of incorporation through merger of the
Delaware corporation into a new Wisconsin corporation, whose Articles of
Incorporation provided for its directors to be divided into three classes, as
nearly equal in number as possible.
The Board believes that the success of the Corporation in producing
long-term shareholder value, as reflected in dividend growth and capital
appreciation, requires long-term and strategic planning, capital commitments
and careful and consistent application of financial and other resources. In the
opinion of the Corporation's Board, a classified Board of Directors facilitates
continuity and stability of leadership and policy by assuring that experienced
personnel familiar with the Corporation and its business will be on the Board
of Directors at all times. The classified Board of Directors is also intended
to prevent precipitous changes in the composition of the Corporation's Board
and, thereby, serves to moderate corresponding precipitous changes in the
Corporation's policies, business strategies and operations and requires careful
deliberation which the Board of Directors deems to be in the best interests of
the Corporation and its shareholders. Board classification is intended to
encourage any person seeking to acquire control of the Corporation to initiate
such an action through arm's-length negotiations with management and the Board
of Directors, who are in a position to negotiate a transaction which is fair to
all of the Corporation's shareholders.
Election of directors by classes is a common practice that has been
adopted by many companies and currently exists at about half of the 500
companies comprising the 1993 Standard & Poor's Stock Price Index. It is
specifically permitted by the laws of many states, including the State of
Wisconsin, as well as the rules of the New York Stock Exchange.
FOR THE REASONS SET FORTH ABOVE, THE BOARD OF DIRECTORS RECOMMENDS A
VOTE AGAINST SHAREHOLDER PROPOSAL #1.
18
<PAGE> 22
SHAREHOLDER PROPOSAL #2
Mr. Charles B. Dandy, 9231 W. County Line Road, Milwaukee, Wisconsin,
who has indicated he holds 32 shares of common stock of the Corporation, has
given notice of his intention to present the following proposal for action at
the Annual Meeting:
WHEREAS, the board of directors is intended to be an independent body
elected by shareholders and charged with the duty, responsibility and authority
to formulate and direct corporate policies, and
WHEREAS, the chairperson of the board, as the person responsible for
presiding at board meetings, setting the agenda, and ensuring that directors
are given adequate information, should have a central role in the board's
evaluation of management's performance, and
WHEREAS, the position of chairperson should be a non-executive role,
with basic responsibility for working with the directors to oversee management
operations and corporate strategy, as well as compliance with laws, accounting
principles and ethical standards applicable to our company,
NOW, THEREFORE, BE IT RESOLVED, that the shareholders request the
by-laws be amended to provide that the positions of chairperson of the board
and chief executive officer/president not be held by the same individual, and
that the chairperson not be a former CEO of this company but be elected from
among the outside, independent directors.
PROPONENT'S STATEMENT IN SUPPORT OF SHAREHOLDER PROPOSAL #2
I believe that shareholders are best served by a board whose
chairperson is chosen from among the independent, outside directors. Such a
person brings objectivity and a unique perspective.
The chief executive officer is an employee of the Company who reports
to the board of directors. Currently, however, the CEO and president of our
company also acts as the chairperson of the very same board to which he is
accountable.
Among the board's functions are evaluating the performance of
management and setting executive compensation, including that of the CEO. Where
the chair and CEO are the same person, we believe the board's ability to
evaluate and oversee management effectively may be compromised. How can one
person who serves as both the chairperson and CEO evaluate his own performance?
Clearly, shareholders have no role to play in the day-to-day operations
of our company. We rely on management to run, direct and operate the company
and we expect the directors to oversee management. We believe, however, that
this system of checks and balances is compromised when the same person is both
CEO and chairperson of the board.
As a long-term shareholder, I believe accountability is a factor in
corporate performance. Such accountability may be improved by having different
individuals serve as chairperson and chief executive officer.
I urge you to vote FOR this proposal.
19
<PAGE> 23
DIRECTORS' STATEMENT IN OPPOSITION TO SHAREHOLDER PROPOSAL #2
The Board would like to note that Mr. Charles B. Dandy is a member of
Local 7232 of the United Paperworkers International Union, which is involved in
a corporate campaign against the Corporation.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE AGAINST THE FOREGOING
SHAREHOLDER PROPOSAL FOR THE FOLLOWING REASONS:
Combining the positions of chairman of the board and chief executive
officer facilitates the ability of the Board to operate effectively and
efficiently. A principal role of the chairman is to propose the general agenda
for Board meetings from among the many operational, administrative and
strategic issues facing the Corporation on a day-to-day basis. The agenda
provides a framework for discussion without limiting consideration of other
matters by the Board. The Corporation and its shareholders benefit by
permitting the board to interact directly and consistently with the person
among them most knowledgeable about the Corporation and about management's
vision for the Corporation's future: the chief executive officer.
The board believes its independence is not compromised by having a
single person serve as chairman and chief executive officer. The functions of
the Board are carried out at the full board and Board committee level. Each of
the directors is a full and equal participant in the major strategic and policy
decisions of the Corporation. The insight, advice, and counsel that each
non-employee director makes available to the Corporation is not likely to
differ in any respect should one of those directors be the chairman.
The responsibilities of two committees of the Board, each composed of
all non-employee directors, make a non-executive chairperson unnecessary. The
Nominating and Salaried Personnel Committee reviews and evaluates performance
of all executive officers, including the Chairman and Chief Executive Officer.
It makes recommendations annually to the full Board of persons to serve in
executive positions, including the positions of chairman and of chief executive
officer, and makes recommendations as to compensation for all elected officers.
The Chairman and Chief Executive Officer is not a member of this committee.
This assures objectivity of the Board when it reviews performance and
compensation matters. The Audit Committee assists the board in fulfilling its
responsibilities for the Corporation's accounting and financial reporting
practices and provides a channel of communication between the board and the
Corporation's independent auditors. The Chairman and Chief Executive Officer is
not a member of this committee. A more detailed discussion about these
committees and particularly the Nominating and Salaried Personnel Committee's
policies regarding compensation can be found earlier in this Proxy Statement.
The Board believes that no meaningful additional measure of
independence would be provided by a non-executive chairman. In fact, in the
Board's view, the separation of offices would undermine the effectiveness of
the chief executive officer and could conceivably create confusion, both within
and outside the Corporation, regarding the corporate direction. The board
believes that the interests of the Corporation and its shareholders are best
served at this time by the experience, consistent direction and ability for
decisive action afforded by a single full-time person serving as chairman and
chief executive officer, subject to oversight by the Corporation's
non-executive directors.
FOR THE REASONS SET FORTH ABOVE, THE BOARD OF DIRECTORS RECOMMENDS A
VOTE AGAINST SHAREHOLDER PROPOSAL #2.
20
<PAGE> 24
SHAREHOLDER PROPOSAL #3
Ms. Candace M. Schultz, 8183 N. Pingree Avenue, Milwaukee, Wisconsin,
who has indicated she holds 15 shares of common stock of the Corporation, has
given notice of her intention to present the following proposal for action at
the Annual Meeting:
BE IT RESOLVED: That the Board of Directors Of Briggs & Stratton
Corporation ("the Company") in the future shall not provide executive
compensation contingent on a change in control of the Company unless such
awards are first submitted to the shareholders for approval.
BE IT FURTHER RESOLVED: That the company shall take the steps necessary
to allow all existing "change of control" contracts to lapse at the earliest
date permitted by the terms of said contracts.
PROPONENT'S STATEMENT IN SUPPORT OF SHAREHOLDER PROPOSAL #3
Our Company has signed at least fifteen "Change of Control" agreements
with its top executives and other high-ranking employees. These contracts
generally provide that for a term of three years following a change in control,
as defined in the contracts, the Company must pay these employees specified
severance benefits, including a lump sum payment of three times the employee's
annual salary and bonus and a "gross up" payment to reimburse the employee for
amounts paid for federal excise taxes. These "golden parachute" provisions are
triggered if the employee is terminated without "cause," if the employee
voluntarily leaves the company for "good reason," or if the employee quits for
any reason during a 30-day window period one year after the change in control.
These contracts were adopted without consideration by the company's
shareholders. Severance pay to corporate managers triggered by a change in
control of the corporation is a controversial matter. Golden parachutes
introduce an element of personal consideration for managers that potentially
conflicts with their fiduciary responsibility to shareholders. Undeniably, this
may cause managers to operate in a manner that encourages a takeover by failing
to maximize value for shareholders.
The issue of whether the company should provide management with golden
parachutes is of such importance that shareholders should make this decision.
Shareholder approval is one of the best ways to address potential conflicts of
interest that may arise between the board and top executives on the one hand,
and shareholders on the other hand, when a change of control is threatened.
I urge you to vote for this resolution.
DIRECTORS' STATEMENT IN OPPOSITION TO SHAREHOLDER PROPOSAL #3
The Board notes that Ms. Candace M. Schultz is the Recording Secretary
of Local 7232 of the United Paperworkers International Union, which is involved
in a corporate campaign against the Corporation.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE AGAINST THE FOREGOING
SHAREHOLDER PROPOSAL FOR THE FOLLOWING REASONS:
The Corporation, in an effort to ensure continuity of management in the
event of any actual or threatened change of control, offers severance
agreements to its executive officers and certain key
21
<PAGE> 25
employees who are an integral part of its management team. These agreements,
which have no current cost to the Corporation, are not intended to alter the
compensation and benefits that the executive could reasonably expect in the
absence of a change in control and are only operative if and when a change in
control is effected.
The severance agreements do not allow an executive to claim an
automatic payment upon a change in control. Instead, executives who have signed
these agreements with the Corporation are committed to remaining in the employ
of the Corporation for at least one year following the effective date of a
change in control, a substantial benefit to the Corporation. If the executive
is fired for "cause" or voluntarily resigns other than for "good reason" or
outside of the 30-day window after one year, the executive is not entitled to
the severance payments.
The Board of Directors strongly believes that severance benefits of
this type are in the shareholders' best interests because the agreements
diminish the inevitable distraction of the executive by virtue of the personal
uncertainties and risks created by a pending or threatened Change of Control.
Without a severance benefit, executives could be tempted to leave the
Corporation for another position which would offer greater security at the
precise time when management continuity is most critical to shareholder
interests. In short, the agreements, by alleviating personal concerns, permit
key executives to act objectively and in the shareholders' best interests, even
when their jobs and financial well being may be threatened by a would-be
acquiror of the Corporation.
Contrary to the proponent's assertion that such agreements create a
conflict of interest between management's personal concerns and its
responsibility to the shareholders, it is the firm conviction of the Board that
the security offered by severance agreements enables key executives to remain
focused and objective during a threatening situation and to act decisively to
guarantee the preservation of the Corporation's strength and value to its
shareholders.
It is the sense of the Board that severance agreements offered at its
discretion enhance the current value of the Corporation by positively
influencing its expected future value. Accordingly, the Board of Directors
believes that approval of the proposal would be detrimental to the best
interest of the Corporation and its shareholders.
FOR THE REASONS SET FORTH ABOVE, THE BOARD OF DIRECTORS RECOMMENDS A
VOTE AGAINST SHAREHOLDER PROPOSAL #3.
SHAREHOLDER PROPOSAL #4
Mr. Joseph G. Chambers, 9325J W. Allyn Street, Milwaukee, Wisconsin,
who has indicated he holds 15 shares of common stock of the Corporation, has
given notice of his intention to present the following proposal for action at
the Annual Meeting:
BE IT RESOLVED: That the shareholders of Briggs & Stratton Corporation
(the "Company") hereby request that the Board of Directors redeem the
shareholder rights issued pursuant to the "Rights Agreement" (the "Agreement")
adopted on December 20, 1989, unless the Agreement is approved by the
affirmative vote of a majority of the outstanding shares at a meeting of
shareholders held as soon as practical.
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PROPONENT'S STATEMENT IN SUPPORT OF SHAREHOLDER PROPOSAL #4
In 1989, the Board of Directors adopted a "Rights Agreement" which is a
type of corporate anti-takeover device commonly known as a "poison pill."
Under its terms, shareholders receive one "Right" per common share held
which becomes exercisable if certain events occur relating to a person or group
acquiring or attempting to acquire 20% or more of the outstanding shares of
common stock. This "right" entitles the holder to purchase one half of one
common share of the Company's stock at a price of $85 per full share, subject
to adjustment. If the Company is involved in a merger or other business
combination at any time after the Rights become exercisable, each holder of a
Right will thereafter have the right to receive, upon the exercise thereof at
the then current purchase price, that number of shares of common stock of the
acquiring company which at the time of such transaction will have a market
value of two times the purchase price. In addition, in the event that any
person or group of persons becomes the beneficial owner of 20% or more of the
outstanding common stock, each holder of a Right, other than such person or
persons, will have the right to receive upon exercise at the then current
purchase price that number of common shares having a market value of two times
the purchase price.
The Board of Directors has admitted that, in the event of a takeover
attempt, the Rights Agreement could "have the effect of discouraging a tender
offer or other attempt to obtain control of the Corporation, even though such
attempt might be beneficial to the Corporation and its shareholders." I believe
the possibility of a takeover does not justify the unilateral implementation of
an anti-takeover measure such as a poison pill without the specific approval of
the shareholders.
Poison pills are very powerful takeover defense mechanisms which the
company has admitted could be detrimental to the interests of the shareholders.
In addition to this poison pill, the company has numerous other anti-takeover
protections, including the Company's staggered board of directors and the
takeover restrictions of Wisconsin corporate law.
A takeover defense as powerful as a poison pill should have been
thoroughly explained to the shareholders and then submitted to a shareholder
vote. This proposal seeks to give the shareholders an opportunity to express
their views on the Rights Agreement. I urge you to vote for this resolution.
DIRECTORS' STATEMENT IN OPPOSITION TO SHAREHOLDER PROPOSAL #4
The Board notes that Mr. Joseph G. Chambers is the Treasurer of Local
7232 of the United Paperworkers Union, which is involved in a corporate
campaign against the Corporation.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE AGAINST THE FOREGOING
SHAREHOLDER PROPOSAL FOR THE FOLLOWING REASONS:
The proposal is intended to encourage the Corporation's Board of
Directors to redeem the Stock Purchase Plan Rights that all shareholders
possess under the Corporation's Shareholder Rights Plan (the "Rights Plan").
The Board believes redemption of the Rights would remove a valuable protection
for shareholders and eliminate an important tool designed to protect your
interests. Redemption at this time could potentially deprive you of substantial
economic benefits in the future.
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Shareholder rights plans were developed to counter a wide range of
coercive tactics that had become common in hostile takeovers. A key function of
a rights plan is to encourage bidders to negotiate with the board of a target
company, to produce better offers for all shareholders. Rights plans give
boards time to evaluate offers, investigate alternatives, and take steps
necessary to maximize value for all shareholders.
A consensus has gradually emerged among major U.S. corporations that
rights plans help inhibit abusive conduct and assist directors in fulfilling
their fiduciary duty to all shareholders. Hundreds of corporations have adopted
rights plans. These corporations apparently found adoption of a rights plan to
be a prudent step to take to protect shareholder interests even though they
were not the subject of takeover bids.
A shareholder rights plan is not intended to prevent a takeover on
terms that are beneficial to and fair and equitable to all shareholders. Many
corporations that adopted rights plans were later acquired by others. The
Briggs & Stratton Corporation Shareholder Rights Plan allows the Board an
opportunity to assess the benefits of and the adequacy and fairness of any
offer and protect shareholders against potential abuses during a takeover
process, including certain practices which do not treat all shareholders fairly
and equally, such as partial and two-tier tender offers, coercive offers and
creeping stock accumulation programs.
The Rights Plan allows the Board adequate time and flexibility to
analyze whether or not a takeover proposal is beneficial, and if so, to
negotiate on behalf of the shareholders the highest possible bid from a
potential acquiror and to develop alternatives which may better maximize
shareholder values, preserve the long term value of the Corporation for the
shareholders and ensure that all shareholders are treated fairly and equally.
Under State Law, the Board is responsible for managing the
Corporation's business and affairs, including the evaluation of any unsolicited
offer. The Board believes that the adoption of the Shareholder Rights Plan was
a valid exercise of that responsibility and that its recommendation to vote
against the proposal is also consistent with its fiduciary duties. Shareholder
rights plans have been repeatedly upheld by the courts.
The Board may, pursuant to the terms of the Rights Plan, redeem the
rights to permit an acquisition that it deems adequately reflects the value of
the Corporation and to be in the best interests of all shareholders. To redeem
the rights now would be to strip shareholders of an important protection
against unfair takeover attempts when the Corporation's common stock is subject
to volatile changes and, ultimately, reduce the long term value for all
shareholders.
FOR THE REASONS SET FORTH ABOVE, THE BOARD OF DIRECTORS RECOMMENDS A
VOTE AGAINST SHAREHOLDER PROPOSAL #4.
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SHAREHOLDER PROPOSAL #5
Mr. Alan J. Alt and Ms. Linda M. Alt, W144 N8477 MacArthur Drive,
Menomonee Falls, Wisconsin, who have indicated they hold 33 shares in joint
tenancy, have given notice of their intention to present the following proposal
for action at the Annual Meeting:
Resolved, To adopt the following new by-law:
Article 2:11
COMMITTEE OF SHAREHOLDER REPRESENTATIVES
1. The corporation shall have a committee of shareholder
representatives consisting of three members. The committee shall review the
management of the business and affairs of the corporation by the board of
directors and shall advise the board of its views and the views of shareholders
which are expressed to the committee. The committee may, at the expense of the
corporation, engage expert assistance and incur other expenses in a reasonable
amount not to exceed in any fiscal year $.01 multiplied by the number of common
shares outstanding at the beginning of the year. The committee shall be given
the opportunity to have included in the corporation's proxy statement used in
its annual election of directors a report of not more than 2,500 words on the
committee's activities during the year, its evaluation of the management of the
corporation by the directors, and its recommendations on any matters proposed
for action by shareholders.
2. The members of the committee shall be elected by the shareholders by
plurality vote at their annual meeting. Elections of members shall be conducted
in the same manner as elections of directors. Each member shall be paid a fee
equal to the average fee paid to non-employee directors, shall be reimbursed
for reasonable travel and other out-of-pocket expenses incurred in serving as a
member, and shall be entitled to indemnification and advancement of expenses as
would a director.
3. The corporation shall include in its proxy materials used in the
election of directors nominations of and nominating statement for members of
the committee submitted by any shareholder or group of shareholders (other than
a fiduciary appointed by or under authority of the directors) which has owned
beneficially, within the meaning of Section 15 (d) [sic] of the Securities
Exchange Act of 1934, at least one million dollars ($1,000,000) in market value
of common stock of the corporation continuously for the three-year period prior
to the nomination. Nominations must be received by the corporation not less
than ninety nor more than 180 days before the annual meeting of shareholders.
The corporation's proxy materials shall include biographical and other
information regarding the nominee required to be included for nominees for
director and shall also include a nominating statement of not more than 500
words submitted at the time of nomination by the nominating shareholder or
group of shareholders.
4. Nothing herein shall restrict the power of the directors to manage
the business and affairs of the corporation.
5. This Article shall not be altered or repealed without approval of
the shareholders.
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PROPONENT'S STATEMENT IN SUPPORT OF SHAREHOLDER PROPOSAL #5
The proposed by-law would establish a three-member committee of
shareholder representatives which would review and oversee the actions of the
board of directors in managing the business and affairs of the company. We
believe such a committee would be an effective mechanism for shareholders to
communicate their views to the board and would serve a useful advisory function
at relatively little cost.
DIRECTORS' STATEMENT IN OPPOSITION TO SHAREHOLDER PROPOSAL #5
The Board notes that Mr. Alan J. Alt is an Alternate Grievance
Representative of Local 7232 of the United Paperworkers International Union,
which is involved in a corporate campaign against the Corporation.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE AGAINST THE FOREGOING
SHAREHOLDER PROPOSAL FOR THE FOLLOWING REASONS:
Under the Wisconsin Business Corporation Law, the business and affairs
of a corporation are to be managed under the direction of its board of
directors. To add a new committee of this sort would, in the Board's view, be
needlessly cumbersome and expensive. While the scope and nature of the proposed
committee's activities are vague and poorly defined, nonetheless, many of these
appear to duplicate the existing activities of the Board and officers in
communicating with shareholders and keeping them informed about the management
of the business of the Corporation. Finally, the Board believes the committee
is likely to interfere with and reduce the efficiency of the normal management
of the Corporation and that it would not enhance shareholder value.
Moreover, the proposal would give rights to Briggs & Stratton
Corporation's largest shareholders not given to the vast majority of
shareholders. As of the close of business July 3, 1994, less than 0.01% of the
Corporation's registered shareholders owned stock worth $1 million or more in
market value, the threshold level set by this proposal to gain preferential
rights to include nominating statements in the proxy statement. Although
shareholders could form coalitions to reach the threshold, as a practical
matter only the largest shareholders would enjoy these special rights.
Briggs & Stratton Corporation has had a long standing commitment to
shareholder communications. To ensure effective two-way communication between
Briggs & Stratton shareholders and senior management, shareholder relations is
the responsibility of the Secretary-Treasurer, who reports directly to the
Chairman & Chief Executive Officer and is a member of the Board of Directors.
In addition, senior management officials speak with shareholders on a regular
basis. The Corporation also maintains a full-time shareholder relations staff
to answer the calls and letters of shareholders, both large and small.
The Board believes that forming a "committee of shareholder
representatives" as described in the proposal, to "advise the Board of its
views and the views of shareholders which are expressed to the committee" would
be costly, counter-productive, and bureaucratic at a time when efforts are, and
should be, directed toward greater efficiency and productivity. Among other
things, the committee would duplicate the shareholder communication efforts of
the shareholder relations department. Under the proponents' plan based on a
projected number of shares outstanding, the three-member committee could have a
budget of roughly $400,000 without any clear benefit to the shareholders.
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Briggs & Stratton Corporation has performed well for its shareholders
in fiscal 1994 and in recent years. The Corporation reported record earnings in
1994 and its return on equity was 26.8%, higher than the average return
experienced in the last four years. More importantly, Economic Value Added
("EVA") (net operating profit after taxes, less capital charge), the
performance measure the Corporation has adopted, has grown significantly. The
Corporation's Economic Return on Capital was 17.3%, versus 7.7% in 1990,
the first year these figures were reported. As shown in the Performance Graph
included in this Proxy Statement, the Corporation's cumulative return over the
last five years has exceeded the average for its peers in the Standard & Poor's
Machinery Group and the average for all Standard & Poor's 500 companies. In
addition, Briggs & Stratton has increased its dividend payments to shareholders
three times in the last two years. In fiscal 1994, the Corporation's dividend
payment was $1.80 per share, up 6% from fiscal 1993 and 12.5% from fiscal 1992.
FOR THE REASONS SET FORTH ABOVE, THE BOARD OF DIRECTORS RECOMMENDS A
VOTE AGAINST SHAREHOLDER PROPOSAL #5.
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<PAGE> 31
AUDITORS
The Board of Directors of the Corporation has selected the public
accounting firm of Arthur Andersen & Co. as its independent auditors for the
current year. A representative of Arthur Andersen & Co. will be present at the
Annual Meeting and will have the opportunity to make a statement if he desires
to do so and will be available to respond to appropriate questions.
ANNUAL REPORT TO THE SECURITIES AND EXCHANGE
COMMISSION ON FORM 10-K
The Corporation is required to file an annual report, called Form 10-K,
with the Securities and Exchange Commission. A copy of Form 10-K for the fiscal
year ended July 3, 1994 will be made available, without charge, to any person
entitled to vote at the Annual Meeting. Written request should be directed to
Frances R. Remshak, Office of the Corporate Secretary, Briggs & Stratton
Corporation, P.O. Box 702, Milwaukee, Wisconsin 53201.
STOCKHOLDER PROPOSALS
Proposals which shareholders intend to present at the 1995 Annual
Meeting of Shareholders must be received at the Corporate Offices Building in
Wauwatosa, Wisconsin no later than July 21, 1995, in order to be presented at
the meeting (and must otherwise be in accordance with the requirements of the
Bylaws of the Corporation), and must be received by May 11, 1995 for inclusion
in the proxy material for that meeting.
OTHER MATTERS
The Directors of the Corporation know of no other matters to be brought
before the meeting. If any other matters properly come before the meeting,
including any adjournment or adjournments thereof, it is intended that proxies
received in response to this solicitation will be voted on such matters in the
discretion of the person or persons named in the accompanying proxy form.
BY ORDER OF THE BOARD OF DIRECTORS
BRIGGS & STRATTON CORPORATION
Robert H. Eldridge, Secretary
Wauwatosa, Wisconsin
September 8, 1994
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PROXY
[LOGO] BRIGGS & STRATTON CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS - OCTOBER 19, 1994
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned does hereby constitute and appoint FREDERICK P.
STRATTON, JR. and ROBERT H. ELDRIDGE, and each of them, with several power of
substitution, attorneys and proxies, for and in the name, place and stead of
the undersigned, to vote all shares votable by the undersigned at the
shareholders' annual meeting of Briggs & Stratton Corporation to be held at
Wauwatosa, Wisconsin, October 19, 1994 at 1:30 p.m. Central Daylight Time and
any adjournments thereof, subject to the directions indicated on the reverse
side hereof, hereby revoking any proxy previously given.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED ON THE
REVERSE SIDE HEREOF. IF NO DIRECTION IS MADE, THE PROXY WILL BE VOTED FOR
PROPOSALS (a) AND (b), AGAINST PROPOSALS (c): (1), (2), (3), (4) AND (5), AND
IN THE DISCRETION OF THE PROXYHOLDERS ON OTHER MATTERS AS MAY PROPERLY COME
BEFORE THE MEETING.
Signed _______________________________
_______________________________
Dated __________________________, 1994
Please sign name exactly as it appears
hereon. When signed as attorney, executor,
trustee or guardian, please add title. For
joint accounts, each owner should sign.
/ / I PLAN TO ATTEND THE MEETING.
BE SURE TO SIGN AND DATE THE REVERSE SIDE OF THIS CARD.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION OF DIRECTORS AND
PROPOSAL (b)
(a) Election of Directors: Nominees - John L. Murray, John S. Shiely, Charles
I. Story
/ / VOTE FOR all nominees listed above* / / VOTE WITHHELD from all
nominees listed above
*To withhold authority to vote for any nominee, write the nominee's
name on the space below.
__________________________________________________
(b) Proposal to approve amendment to Articles of Incorporation to increase
authorized shares.
/ / FOR / / AGAINST / / ABSTAIN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST PROPOSALS (c): (1), (2), (3),
(4) AND (5).
(c) (1) Proposal urging declassification of Board.
/ / FOR / / AGAINST / / ABSTAIN
(2) Proposal to separate positions of Chairperson and CEO and require
Chairperson to be outside director.
/ / FOR / / AGAINST / / ABSTAIN
(3) Proposal to eliminate change of control agreements.
/ / FOR / / AGAINST / / ABSTAIN
(4) Proposal to redeem shareholder rights issued under Rights Agreement.
/ / FOR / / AGAINST / / ABSTAIN
(5) Proposal to establish Committee of Shareholder Representatives.
/ / FOR / / AGAINST / / ABSTAIN
(d) In their discretion on other matters as may properly come before the
meeting.
All as set forth in the Notice and Proxy Statement relating to the meeting,
the receipt of which is hereby acknowledged.
<PAGE> 33
[Briggs & Stratton Letterhead]
Frederick P. Stratton, Jr.
Chairman and Chief Executive Officer
September 8, 1994
Dear Fellow Shareholder:
Enclosed is your proxy statement for the 1994 Annual Meeting of Shareholders,
which will be held at 1:30 p.m. on Wednesday, October 19 at the company's
office in Wauwatosa, Wisconsin. Whether or not you plan to attend the meeting
in person, I urge you to sign, date and mail the enclosed proxy card at your
earliest convenience.
This year your vote is particularly important. After considering your company's
improved financial performance, the increase in market value of your company's
stock, and good prospects for the coming year, your Board of Directors
authorized a 2-for-1 stock split contingent upon your approval of an increase
in the number of authorized shares. Your Board of Directors recommends that you
vote FOR the proposal to amend the Corporation's Articles of Incorporation to
increase the number of authorized shares of common stock so that the split can
be accomplished. Your Board of Directors also recommends that you vote to
elect John L. Murray, John S. Shiely and Charles I. Story, the three director
nominees listed in the enclosed proxy statement.
As noted in the proxy statement, five shareholder proposals are expected to be
presented at the meeting. Your Board of Directors urges you to vote AGAINST
these shareholder proposals. These proposals have been submitted by employees
who are members of United Paperworkers International Union Local 7232 and are
part of a corporate campaign against your company. Your Board believes that
voting for these proposals would encourage and prolong the effort by the Union
to use corporate governance and other corporate campaign tactics to harass and
pressure the company to enter into labor agreements that are contrary to your
interests. That is one important reason your Board urges you to vote AGAINST
these shareholder proposals.
Your company continues to be committed to dealing fairly with all of its
constituencies, including its employees. As always, your Board will continue to
be responsive to legitimate concerns of its shareholders. We appreciate your
past support of our efforts, and we hope you will continue to support us.
Sincerely,
/s/ F. P. Stratton, Jr.
Chairman and Chief Executive Officer
[Briggs & Stratton Letterhead]
