<PAGE> 1
BRIGGS & STRATTON CORPORATION
Dear Shareholder:
Georgeson & Company has been engaged by Briggs & Stratton Corporation to
solicit proxies on behalf of the Company for the October 18, 1995 Annual
Meeting of Shareholders. Please accept our thanks for sending in your White
proxy in regard to that meeting.
To avoid the possibility of the validity of your proxy being challenged or
disqualified for the reason(s) indicated below, we are requesting that you
sign, date and mail the enclosed White proxy with the correction indicated
below in the self-addressed envelope provided for your convenience. This White
proxy will automatically revoke any previous proxy.
/ / YOUR PREVIOUS PROXY WAS UNSIGNED. If signing as attorney, executor,
administrator, personal representative of the estate, corporate officer,
partner, trustee, custodian or guardian, please sign and give your full
title as such.
/ / YOUR PREVIOUS PROXY WAS UNDATED. Please sign and date to conform to
the name shown on the proxy.
/ / YOUR PREVIOUS PROXY WAS NOT SIGNED BY ALL JOINT OWNERS OR TRUSTEES. If
shares are registered in the name of more than one person, each person
should sign the proxy. If a joint tenant is deceased, the proxy should
also be signed by the executor or administrator of the deceased
tenant-in-common, and a copy of proof of such person's status as executor
or administrator should be sent with the proxy.
/ / YOUR PREVIOUS PROXY OMITTED YOUR TITLE OR AUTHORITY. If signing as
attorney, executor, administrator, personal representative of the estate,
corporate officer, partner, trustee, custodian or guardian, please sign
and give your full title as such.
/ / YOUR PREVIOUS PROXY, AS SIGNED, DID NOT CONFORM TO THE NAME SHOWN ON THE
PROXY. Please date and sign this proxy EXACTLY as the registration appears
on the proxy, including your full title if signing other than in an
individual capacity.
/ / YOUR PREVIOUS PROXY, AS MARKED, DID NOT CLEARLY SPECIFY YOUR INSTRUCTIONS.
Please sign, date and clearly mark your proxy.
/ / OTHER____________________________________________________________________
_________________________________________________________________________
Your proxy will be voted as directed, but if no direction is indicated, it will
be voted as the Board of Directors of Briggs & Stratton Corporation recommends.
Since time is of the essence, we would greatly appreciate your signing, dating
and mailing this new White proxy as soon as possible. Please mail it in the
envelope provided for your convenience. Once again, we appreciate your support.
Sincerely,
Georgeson & Company Inc.
<PAGE> 2
[BRIGGS & STRATTON CORPORATION LETTERHEAD]
October 3, 1995
Dear Institutional Investor:
Enclosed is an information packet concerning Briggs & Stratton Corporation and
its recent performance and corporate governance practices. I am sure you will
agree that we have produced extremely good returns for our shareholders over
the past five years.
This year's Annual Meeting of Shareholders is scheduled for October 18, 1995.
In a change from our prior practice, this meeting will not be held in
Milwaukee, but at the Tarrytown House Conference Center in Tarrytown, New York.
Our intent is to accomplish the business that must be conducted at the Annual
Meeting of Shareholders; we do not anticipate making a presentation on
operations and strategies at this meeting. In accordance with our regular
communications policy, we remain available to discuss with you our operations
or any other matters, at your convenience.
You should know that Local 7232 of the United Paperworkers International Union,
which represents the majority of the Company's unionized workers at our
Wisconsin plants, has again sponsored a shareholder proposal. At the 1994
Annual Meeting, the Union sponsored a proxy fight in support of a dissident
director candidate and five shareholder proposals. The Union was soundly
defeated on all counts.
We believe that last year's proxy campaign and this year's proposal by the
Financial Secretary/Treasurer of Local 7232 are part of a long-standing
corporate campaign against the Company, and were triggered by the decision to
transfer operations to new and existing facilities outside Wisconsin, resulting
in a reduction of our unionized workforce in Wisconsin. The decision to expand
operations outside Wisconsin was a most difficult one for your Board. Our
evolving, extremely competitive marketplace, however, requires that we continue
to cut costs and increase productivity if we are to continue to deliver strong
performance to our shareholders.
It is extremely important that our Board continue to be able to make its
decisions in a deliberative fashion which, while taking into account the
interests of all our constituencies, places paramount importance on shareholder
interests. Corporate campaigns, which misuse the proxy process by pressuring
and harassing the Board on behalf of narrow interest groups, attempt to hinder
that process. I strongly urge you to reject the Paperworkers' repeat efforts to
subvert the principles of corporate democracy by voting FOR the Board's
nominees and AGAINST the shareholder proposal.
We look forward to having the opportunity to speak with you on this matter.
Please do not hesitate to call Robert H. Eldridge, Executive Vice President and
Chief Financial Officer, Secretary-Treasurer, or me at 414-259-5333 if you have
any questions or concerns about our Annual Meeting or our corporate operations.
Sincerely,
Frederick P. Stratton, Jr.
Chairman and Chief Executive Officer
Enclosure
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_______________________________________________________________________________
BRIGGS & STRATTON CORPORATION
A PROVEN TRACK RECORD OF MANAGING
FOR SHAREHOLDER VALUE
_______________________________________________________________________________
FY95 HIGHLIGHTS
- - RECORD SALES OF $1.34 BILLION, A 4% INCREASE OVER FY94
- - RECORD NET INCOME OF $104.8 MILLION
- - RETURN ON AVERAGE SHAREHOLDERS' INVESTMENT OF 24.9%
- - CUMULATIVE TOTAL SHAREHOLDER RETURN FOR PAST 5 YEARS 1.5X BETTER THAN S&P 500
AND PEER GROUP
- - DIVIDENDS INCREASED TO $.98 PER SHARE, ON A POST-SPLIT BASIS
- - CASH OPERATING EARNINGS WERE $39 MILLION GREATER THAN COST OF CAPITAL
- - 2 FOR 1 STOCK SPLIT IN NOVEMBER 1994
- - SPIN-OFF OF AUTOMOTIVE LOCK BUSINESS IN FEBRUARY 1995
The Board of Directors of Briggs & Stratton Corporation is committed to
shareholder value-driven management. After a disappointing performance in
fiscal 1989 (net loss of $20 million), the Board oversaw a dramatic
restructuring of operations and instituted an Economic Value Added (EVA)
performance measurement and incentive compensation system. The premise of this
system is that the value of the Company is enhanced if the capital invested in
the Company's operations yields a cash return that is greater than that
expected by the providers of capital. For fiscal year 1995, the economic return
on capital employed was 17.6%.
The following charts demonstrate the success of the Company's value-focused
efforts.
1
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BRIGGS & STRATTON CORPORATION
(BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGES IN FISCAL 1994)
(ADJUSTED FOR 2-FOR-1 STOCK SPLIT EFFECTIVE IN FISCAL 1995)
NET INCOME
(PER SHARE)
[BAR GRAPH]
FY91 $1.26
FY92 $1.78
FY93 $2.43
FY94 $3.54
FY95 $3.62
SHAREHOLDERS' INVESTMENT
(PER SHARE)
[BAR GRAPH]
FY91 $ 9.85
FY92 $10.80
FY93 $12.45
FY94 $13.96
FY95 $15.19
2
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BRIGGS & STRATTON CORPORATION
(ADJUSTED FOR 2-FOR-1 STOCK SPLIT IN FISCAL 1995)
ANNUAL DIVIDENDS
(PER SHARE)
[BAR GRAPH]
FY91 $0.80
FY92 $0.80
FY93 $0.85
FY94 $0.90
FY95 $0.98
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, 1990
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)
[LINE GRAPH]
<TABLE>
<CAPTION>
6/90 6/91 6/92 6/93 6/94 6/95
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Briggs & Stratton . . . . . . . 100 106 150 228 236 268
S&P 500 . . . . . . . . . . . . 100 107 122 138 140 177
S&P Machinery . . . . . . . . . 100 96 94 126 137 173
</TABLE>
* Total return calculation is based on compounded monthly returns with
reinvested dividends.
3
<PAGE> 6
BRIGGS & STRATTON -
THE WORLD'S LEADER IN SMALL ENGINES
Briggs & Stratton Corporation is the world's largest producer of air-cooled
gasoline engines for outdoor power equipment. The Lawn and Garden Equipment
Industry is its largest market, accounting for over 84% of total equipment
sales. The Company provides an engine for virtually every use requiring 3
through 20 horsepower, including walk-behind and riding lawn mowers, garden
tillers and shredders, garden tractors and vacuums. Total engine and parts
sales in fiscal 1995 were $1.276 billion.
The Company had also been the world's largest producer of locks for automobiles
and trucks. That division was spun off to the shareholders in February 1995 by
distributing one share of Strattec Security Corporation, the new name for that
business, for each 5 shares of the Company. On September 28, 1995 the closing
price of Strattec stock was $14.75. The spin-off was consistent with the
Company's strategic focus: concentration of resources on securing the Company's
competitive position as the leader in high volume, high value, low cost,
air-cooled engines and related products.
The Company has manufacturing facilities in Wauwatosa, Menomonee Falls and West
Allis, Wisconsin; Murray, Kentucky and Poplar Bluff, Missouri. As part of its
facilities plan, the Company increased operations at its Poplar Bluff and
Murray factories and is phasing in production at four new manufacturing
facilities beginning in fiscal 1996. The new facilities are located in Auburn,
Alabama; Statesboro, Georgia; Rolla, Missouri and Ravenna, Michigan. The
estimated capital expenditures for these projects is $144 million.
This facilities plan will improve operational efficiencies and better serve our
customers through improved capacity capabilities and closer proximity to our
OEM customer plants. EVA analysis indicates that this facilities plan should
yield cash operating returns in excess of the cost of capital on the stated
investment in the program.
The Company also has a manufacturing operation near Osaka, Japan through a
joint venture with Daihatsu Motor Company, as well as a facility in Chongqing,
China through a joint venture with Puling Machinery Works and Yimin Machinery
Plant.
The total number of employees was approximately 6,958 at the end of fiscal year
1995.
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THE COMPANY'S MANAGEMENT PHILOSOPHY - MANAGING
FOR VALUE CREATION TO INCREASE SHAREHOLDER VALUE
In 1989 the Company suffered a net loss in excess of $20 million. That loss and
the consequent steep decline in stock price caused the Board to reevaluate the
Company's basic strategy and management philosophy.
It has been said that the ultimate job of management is to effectively manage
the corporation's six major constituencies: shareholders, lenders, employees,
customers, suppliers and the community. The issue becomes: to what end must
these constituencies be managed? The early entrepreneurs knew instinctively
what the right answer was because they were managing their own capital. These
corporate constituencies must be managed toward the end of creating value. But,
with the de-concentration of corporate shareholdings, the managements of many
major corporations focused more on their own survival, and they accordingly
managed these corporate constituencies toward the end of arbitrating value
demands among these constituencies (i.e., buying peace). In other words, their
activities were much more distributive (allocating value) than they were
integrative (creating value).
At Briggs & Stratton, management recognized early on that the creation of
shareholder value was imperative. In 1990, the Company developed and
implemented its Economic Value Added ("EVA") Program. The purpose of the EVA
value management program is to link our performance measurement and incentives
to the goals of the capital providers. The Company recognizes that it has a
basic obligation to provide an adequate return to its capital providing
corporate constituencies. It recognizes a further obligation to create value
for its shareholders over and above the cost of capital. How is that achieved?
Real value creation requires an integrative process of managing the four
non-capital providing corporate constituencies (employees, customers, suppliers
and community) toward the end of creating value. This is what Briggs & Stratton
refers to as "Managing for Value Creation."
The Company's approach to shareholder value creation has received a significant
amount of attention, including coverage in the September 20, 1993 issue of
Fortune magazine. Briggs & Stratton was listed among the "highly regarded major
corporations" such as Coca-Cola, AT&T, Quaker Oats and CSX that have adopted
EVA programs. The article notes that "Managers who run their businesses
according to the precepts of EVA have hugely increased the value of their
companies. Investors who know about EVA, and know which companies are employing
it, have grown rich."
The Company's value-driven restructuring involved a focusing of the Company's
strategy on solidifying its position as the broad scope cost leader in the
industry, the adoption of a decentralized organization structure, and the
integration of value based performance measurement and incentive compensation
systems. The benefits realized from the restructuring have been substantial:
better product line focus, improved financial accountability, more thorough
integration of cross-functional initiatives, better assessment of labor/capital
trade-offs and internal development of experienced operational general
managers.
5
<PAGE> 8
THE CURRENT CHALLENGE - TO MEET THE DEMANDS OF
AN EVOLVING MARKET OF MASS MERCHANDISERS
The major challenge currently confronting Briggs & Stratton is to continue the
Company's effective capital and cost management efforts to respond to the
evolving nature of its marketplace -- the shift from dealers to mass
merchandisers, such as Wal-Mart and Kmart. The buying power of these mass
merchandisers permits them to demand lower prices from the manufacturers who, in
turn, seek the lowest possible prices for their purchased components, such as
engines.
The six largest retailers now account for approximately half of the lawn mowers
sold in the United States. Most walk-behind lawn mowers and a majority of
riding lawn mowers are sold by mass merchandisers. The consequential reduction
in the premium our brand equity could command requires extraordinary efforts to
support our broad scope cost leadership strategy.
As a major step in the efforts to manage labor costs, the Company is
transferring the balance of its Milwaukee small engine manufacturing operations
to existing plants in Murray, Kentucky and Poplar Bluff, Missouri, and a
recently purchased and refurbished plant in Rolla, Missouri. Most large engine
assembly and some other large engine manufacturing operations are being
transferred to new plants in Auburn, Alabama and Statesboro, Georgia. This
facilities relocation and construction program is being implemented over a
three year period, which began last year, and will involve capital expenditures
of approximately $124 million. EVA analysis indicates that the expenditures
required should produce strong returns for the shareholders.
An unfortunate consequence of the facilities relocation and expansion program
was the reduction of the Wisconsin hourly workforce by approximately 2,000.
The vast majority of workers employed there are members of the United
Paperworkers International Union. The Union sponsored a proxy contest at the
1994 Annual Meeting in support of a dissident candidate for election as
director and five shareholder proposals. The Union's candidate and proposals
were defeated. The Paperworkers' proxy campaign was part of a long-standing
program of harassing the Company in order to keep jobs in Wisconsin.
At the 1995 Annual Meeting, an officer of the Union local that represents a
majority of the Company's hourly employees has again sponsored a shareholder
proposal seeking the declassification of the Board of Directors. For the
reasons stated in the Proxy Statement, the Board recommends that you vote
against this shareholder proposal.
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CORPORATE GOVERNANCE AT BRIGGS & STRATTON -
A STRONG BOARD IS THE BEST GUARANTOR OF THE
SHAREHOLDERS' INTERESTS
The Board of Directors believes that the most effective corporate governance
measure is a strong, independent Board of Directors dedicated to the best
interests of the corporation's owners, the shareholders.
The Briggs & Stratton Board is composed of nine directors, only three of who
are inside directors (the CEO, the President/COO and the Executive VP/CFO, &
Secretary-Treasurer). The key Board Committees, the Nominating and Salaried
Personnel Committee and the Audit Committee, are composed entirely of outside
directors.
<TABLE>
<CAPTION>
YEARS OF
DIRECTOR OCCUPATION SERVICE AS A DIRECTOR
- ------------------ ----------------------------------- ---------------------
<S> <C> <C>
M.E. Batten Chairman & CEO, Twin Disc Incorporated 11
R.H. Eldridge Executive VP/CFO & Secretary-Treasurer 7
P.A. Georgescu Chairman & CEO, Young & Rubicam Inc. 9
J.L. Murray Retired Chairman, Universal Foods Corporation 6
C.B. Rogers, Jr. Chairman & CEO, Equifax Inc. 4
J.S. Shiely President & COO 1
C.I. Story President & CEO, INROADS, Inc. 1
F.P. Stratton, Jr. Chairman & CEO 19
E.J. Zarwell Retired Partner, Quarles & Brady 23
</TABLE>
COMMITTEE ASSIGNMENTS
- ---------------------
<TABLE>
<S> <C>
Audit: Messrs. Batten (Chairman), Georgescu, Murray, Rogers and Story
Executive: Messrs. Stratton, Shiely and Zarwell
Nominating and
Salaried Personnel: Messrs. Murray (Chairman), Batten and Rogers
Planning: Messrs. Stratton (Chairman), Georgescu, Rogers, Story and Zarwell
</TABLE>
The Board has a strict policy which requires the retirement of a director at the
Annual Meeting following his/her 70th birthday.
In January 1995, the directors accelerated the expiration date of the Company's
Shareholder Rights Plan to July 1, 1996. The Plan, originally adopted in 1989,
had been scheduled to expire on January 5, 2000.
The Company's record over the past five years, in particular, demonstrates the
effectiveness of the Board in upholding the rights and best interests of
shareholders.
7
