BRIGGS & STRATTON CORP, 10-K405, 1999-09-07

BRIGGS & STRATTON CORP
10-K405, 1999-09-07
ENGINES & TURBINES

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<PAGE> 1

FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

(Mark One)

[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 27, 1999
---------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from to
--------- ---------

Commission file number 1-1370

BRIGGS & STRATTON CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)

A Wisconsin Corporation 39-0182330
------------------------------- ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

12301 WEST WIRTH STREET
WAUWATOSA, WISCONSIN 53222
------------------------- ---------
(Address of principal (Zip Code)
executive offices)

Registrant's telephone number, including area code: 414-259-5333

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class Name of Each Exchange on Which Registered
------------------- -----------------------------------------
Common Stock (par value $0.01 per share) New York Stock Exchange
Common Share Purchase Rights New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: NONE

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes x No
--- ---

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [x]

The aggregate market value of voting stock held by nonaffiliates of the
registrant was approximately $1,353,195,000 based on the reported last sale
price of such securities as of August 24, 1999.

Number of Shares of Common Stock Outstanding at August 24, 1999: 23,123,389.

DOCUMENTS INCORPORATED BY REFERENCE
-----------------------------------
Part of Form 10-K Into Which Portions
Document of Document are Incorporated
-------- ------------------------------------
Proxy Statement for Annual Meeting
on October 20, 1999 Part III

The Exhibit Index is located on page 30.

<PAGE> 2

BRIGGS & STRATTON CORPORATION
1999 FORM 10-K - TABLE OF CONTENTS

PART I PAGE
<S> <C> <C>
Item 1. Business 1
Item 2. Properties 3
Item 3. Legal Proceedings 4
Item 4. Submission of Matters to a Vote of Security Holders 4
Executive Officers of the Registrant 4
PART II
Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters 5
Item 6. Selected Financial Data 6
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations 7
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 11
Item 8. Financial Statements and Supplementary Data 12
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure 28
PART III
Item 10. Directors and Executive Officers of the Registrant 28
Item 11. Executive Compensation 28
Item 12. Security Ownership of Certain Beneficial Owners and Management 28
Item 13. Certain Relationships and Related Transactions 28
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K 28
Signatures 29
</TABLE>

CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS

Certain statements in Item 1. Business and Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations may contain
forward-looking statements that involve risks and uncertainties that could cause
actual results to differ materially from those projected in the forward-looking
statements. The words "anticipate", "believe", "estimate", "expect",
"objective", and "think" or similar expressions are intended to identify
forward-looking statements. The forward-looking statements are based on the
Company's current views and assumptions and involve risks and uncertainties that
include, among other things, the effects of weather on the purchasing patterns
of the Company's customers and end use purchasers of the Company's engines; the
seasonal nature of the Company's business; actions of competitors; changes in
laws and regulations, including accounting standards; employee relations;
customer demand; prices of purchased raw materials and parts; domestic economic
conditions, including housing starts and changes in consumer disposable income;
foreign economic conditions, including currency rate fluctuations; the ability
of the Company's customers and suppliers to meet year 2000 compliance; and
unanticipated internal year 2000 issues. Some or all of the factors may be
beyond the Company's control.

<PAGE> 3
PART I

ITEM 1. BUSINESS

GENERAL

Briggs & Stratton Corporation is the world's largest producer of air cooled
gasoline engines for outdoor power equipment. The Company designs, manufactures,
markets and services these products for original equipment manufacturers (OEMs)
worldwide. These engines are aluminum alloy gasoline engines ranging from 3
through 25 horsepower.

The Company's engines are used primarily by the lawn and garden equipment
industry, which accounted for 77% of fiscal 1999 OEM engine sales. The major
lawn and garden equipment applications include walk-behind lawn mowers, riding
lawn mowers and garden tillers. The remaining 23% of OEM sales in fiscal 1999
were for use on many products for industrial, construction, agricultural and
consumer applications, including generators, pumps and pressure washers. Many
retailers specify the Company's engines on the powered equipment they sell, and
the Briggs & Stratton name is often featured prominently on a product despite
the fact that its engine is just a component. Briggs & Stratton engines are
marketed under various brand names including Classic(TM), Sprint(TM),
Quattro(TM), Quantum(R), INTEK(TM), I/C(R), Diamond I/C(R), Industrial Plus(TM)
and Vanguard(TM).

In fiscal 1999, approximately 21% of the Company's net sales were derived from
sales in international markets, primarily to customers in Europe. Briggs &
Stratton serves its key international markets through its European regional
office in Switzerland, its distribution center in the Netherlands and sales and
service subsidiaries in Australia, Austria, Canada, the Czech Republic, France,
Germany, Mexico, New Zealand, South Africa, Sweden and the United Kingdom. The
Company is a leading supplier of gasoline engines in developed countries where
there is an established lawn and garden equipment market. The Company also
exports to developing nations where its engines are used in agricultural,
marine, construction and other applications.

Briggs & Stratton engines are sold primarily by its worldwide sales force
through direct calls on customers. The Company's marketing staff and engineers
provide support and technical assistance to its sales force.

Briggs & Stratton also manufactures replacement engines and service parts and
sells them to sales and service distributors. The Company owns its principal
international distributors. In the United States the distributors are
independently owned and operated. These distributors supply service parts and
replacement engines directly to approximately 32,000 independently owned
authorized service dealers throughout the world. These distributors and service
dealers implement Briggs & Stratton's commitment to reliability and service.

CUSTOMERS

The Company's sales are made primarily to original equipment manufacturers. The
Company's three largest customers in each of the last three fiscal years were AB
Electrolux (including its Frigidaire Home Products group), MTD Products Inc.,
and Tomkins PLC (including its Murray subsidiary). Sales to each of these
customers were more than 10% of net sales in fiscal 1999, 1998 and 1997. Sales
to all three combined were 42% of net sales in fiscal 1999 and 46% of net sales
in fiscal 1998 and 1997. Under purchasing plans available to all of its gasoline
engine customers, the Company typically enters into annual engine supply
arrangements with these large customers. The Company has no reason to anticipate
a change in this practice or in its historical business relationships with these
equipment manufacturers.

Over the past several years, sales in the United States of lawn and garden
equipment by mass merchandisers have increased significantly, while sales by
independent distributors and dealers have declined. The Company believes that in
1999 more than 75% of all lawn and garden equipment sold in the United States
was sold through mass merchandisers such as Wal-Mart, Sears, Home Depot, Lowe's
and Kmart. Given the buying power of the mass merchandisers, the Company,
through its

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customers, has experienced pricing pressure. The Company expects that this trend
will continue in the foreseeable future. The Company believes that a similar
trend has developed for commercial products for industrial and consumer
applications.

COMPETITION

The small gasoline engine industry is highly competitive. The Company's major
domestic competitors in engine manufacturing are Tecumseh Products Company,
Honda Motor Co., Ltd., Kohler Co. and Kawasaki Heavy Industries, Ltd. Also, two
domestic lawn mower manufacturers, Toro Co. under its Lawn-Boy brand, and Honda,
manufacture their own engines. Eight Japanese small engine manufacturers, of
which Honda and Kawasaki are the largest, compete directly with the Company in
world markets in the sale of engines and indirectly through their sale of end
products that compete with the end products produced by the Company's customers.
Tecumseh Europa S.p.A., located in Italy, is a major competitor in Europe.

The Company believes the major areas of competition from all engine
manufacturers include product quality, brand strength, price, timely delivery
and service. Other factors affecting competition are short-term market share
objectives, short-term profit objectives, exchange rate fluctuations, technology
and product support and distribution strength. Briggs & Stratton believes its
product value and service reputation have given it strong brand name recognition
and enhance its competitive position.

SEASONALITY OF DEMAND

Sales of engines to lawn and garden equipment manufacturers are highly seasonal
because of the buying patterns of retail customers. The majority of lawn and
garden equipment is sold during the spring and summer months when most lawn care
and gardening activities are performed. Sales of lawn and garden equipment are
also influenced by weather conditions. Sales in the Company's fiscal third
quarter have historically been the highest, while sales in the first fiscal
quarter have historically been the lowest.

The sale of lawn and garden equipment has shifted from smaller dealers to larger
mass merchandisers, who do not wish to carry large inventories of lawn and
garden equipment. In order to efficiently use its capital investments and meet
seasonal demand for engines, the Company pursues a balanced production schedule
throughout the year, subject to ongoing adjustment to reflect changes in
estimated demand, customer inventory levels and other matters outside the
control of the Company. Accordingly, inventory levels are generally higher
during the first and second fiscal quarters in anticipation of increased
customer demand in the third fiscal quarter, at which time inventory levels
begin to decrease as sales increase.

Lawn and garden equipment manufacturers have tended to purchase the majority of
engines in the Company's third and fourth fiscal quarter. This seasonal pattern
results in high inventories and low cash for the Company in the second and the
beginning of the third fiscal quarters, with a rapid shift to lower inventories
and ultimately higher cash in the latter portion of the third fiscal quarter and
in the fourth fiscal quarter.

MANUFACTURING

Briggs & Stratton manufactures engines and parts at the following locations in
the United States: Wauwatosa, Wisconsin; Murray, Kentucky; Poplar Bluff and
Rolla, Missouri; Auburn, Alabama; and Statesboro, Georgia. The Company has a
parts distribution center in Menomonee Falls, Wisconsin. The Company has
recently experienced capacity shortages in some of its product offerings.
Management believes that such a condition could persist into the future and,
accordingly, the Company anticipates adding capacity over the next two fiscal
years.

Briggs & Stratton manufactures a majority of the structural components used in
its engines, including aluminum die castings and a high percentage of other
major components, such as carburetors and ignition systems. The Company
purchases certain finished standard commercial

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parts such as piston rings, spark plugs, valves, ductile and grey iron castings,
zinc die castings and plastic components, some stampings and screw machine parts
and smaller quantities of other components. Raw material purchases are
principally for aluminum and steel. The Company believes its sources of supply
are adequate.

The Company has joint ventures with Daihatsu Motor Company for the manufacture
of engines in Japan, with Puling Machinery Works and Yimin Machinery Plant for
the production of engines in China, and with Starting Industrial of Japan for
the production of rewind starters in the U.S. The Company also has two joint
ventures in India. Kirloskar Briggs & Stratton, a joint venture with Kirloskar
Oil Engines Ltd., is responsible for sales and distribution of Briggs & Stratton
engines and parts in India and assembles and distributes generators and pumps
powered by Briggs & Stratton engines. Hero Briggs & Stratton is a joint venture
with Hero Motors, part of the Hero Group, for the manufacture of engines and
transmissions to be used in two wheel transportation vehicles.

The Company has a strategic relationship with Mitsubishi Heavy Industries (MHI)
for the international distribution of air-cooled gasoline engines manufactured
by MHI in Japan.

OTHER GENERAL INFORMATION

The Company holds certain patents on features incorporated in its products;
however, the success of the Company's business is not considered to be primarily
dependent upon patent protection. Licenses, franchises and concessions are not a
material factor in the Company's business.

For the years ending June 27, 1999, June 28, 1998 and June 29, 1997, the Company
spent approximately $17,920,000, $19,950,000 and $19,525,000, respectively, on
Company sponsored research activities relating to the development of new
products or the improvement of existing products. Included in fiscal 1998 and
fiscal 1997 were costs related to the Company's software business of $3,136,000
and $1,968,000, respectively. This business was sold in the first quarter of the
1999 fiscal year.

The average number of persons employed by the Company during the fiscal year was
7,615. Employment ranged from a low of 7,142 in August 1998 to a high of 7,994
in June 1999.

EXPORT SALES

Export sales for fiscal 1999 were $316,115,000 (21% of total sales), for fiscal
1998 were $288,510,000 (22% of total sales) and for fiscal 1997 were
$304,230,000 (23% of total sales). These sales were principally to customers in
European countries.

ITEM 2. PROPERTIES

The corporate offices and one of the Company's manufacturing facilities are
located in a suburb of Milwaukee, Wisconsin. The Company also has manufacturing
facilities in Murray, Kentucky; Poplar Bluff and Rolla, Missouri; Auburn,
Alabama and Statesboro, Georgia. These are owned facilities containing 3.6
million square feet of office and production area. The Company occupies
warehouse space totalling 400,000 square feet in a suburb of Milwaukee,
Wisconsin under a reservation of interest agreement. The Company also leases
80,000 square feet of manufacturing space in the Milwaukee area.

The engine business is seasonal, with demand for engines at its height in the
winter and early spring. Engine manufacturing operations run at capacity levels
during the peak season, with many operations running three shifts. Engine
operations generally run one shift in the summer, when demand is weakest and
production is considerably under capacity. During the winter, when finished
goods inventories reach their highest levels, owned warehouse space may be
insufficient and capacity may be expanded through rented space. Excess warehouse
space exists in the spring and summer seasons. The Company's owned properties
are well maintained.

The Company leases 200,000 square feet of space to house its European warehouse
in the Netherlands and its foreign sales and service operations in Australia,
Austria, Canada, the Czech Republic, France, Germany, India, Mexico, New
Zealand, Russia, South Africa, Sweden, Switzerland and the United Kingdom.

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ITEM 3. LEGAL PROCEEDINGS

There are no pending legal proceedings that are required to be reported under
this item.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the three months ended June 27,
1999.

EXECUTIVE OFFICERS OF THE REGISTRANT

Name, Age, Position Business Experience for Past Five Years
------------------- ---------------------------------------
<S> <C>
FREDERICK P. STRATTON, JR., 60 Mr. Stratton was elected to the position of Chief
Chairman and Chief Executive Officer Executive Officer in May 1977 and Chairman in
(1) (2) (3) November 1986.

JOHN S. SHIELY, 47 Mr. Shiely was elected to his current position in
President and Chief Operating Officer August 1994.
(1) (2)

ROBERT H. ELDRIDGE, 60 Mr. Eldridge was elected to the position of Executive
Executive Vice President and Vice President in April 1995 and Secretary-Treasurer
Secretary-Treasurer (1) in January 1984. He also served as Chief Financial
Officer from April 1995 to October 1998.

MICHAEL D. HAMILTON, 57 Mr. Hamilton was elected to his current position
Executive Vice President - effective June 1989.
Sales and Service

JAMES E. BRENN, 51 Mr. Brenn was elected to his current position in
Senior Vice President and October 1998, after serving as Vice President and
Chief Financial Officer Controller since November 1988.

RICHARD J. FOTSCH, 44 Mr. Fotsch was elected to his current position in May
Senior Vice President and 1999 after serving as Senior Vice President -
General Manager Operations since January 1999. He had previously
held the position Senior Vice President - Engine
Group since July 1997 and prior to that Vice
President; General Manager - Small Engine
Division since May 1993.

HUGO A. KELTZ, 51 Mr. Keltz was elected to his current position in May
Vice President - International 1992.

CURTIS E. LARSON, JR., 51 Mr. Larson was elected to this executive officer
Vice President - Distribution position in October 1995 after serving as Vice
Sales and Service President - Industrial Engine Division since January
1993.
</TABLE>

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<TABLE>
<S> <C>
PAUL M. NEYLON, 52 Mr. Neylon was elected to his current position in
Vice President - Production May 1999, after serving as Vice President -
Operations Support since January 1999. He had
previously held the position of Vice President;
General Manager - Spectrum Division since 1993.

WILLIAM H. REITMAN, 43 Mr. Reitman was elected an executive officer
Vice President - Marketing effective April 20, 1998. He had served as Vice
President Marketing since November 1995, after
serving as Marketing Director - New Ventures since
March 1993.

STEPHEN H. RUGG, 52 Mr. Rugg was elected to his current position in May
Senior Vice President - Sales and Service 1999, after serving as Vice President - Sales since
November 1995. His prior position was Vice
President - Sales and Marketing.

THOMAS R. SAVAGE, 51 Mr. Savage was elected to his current position
Senior Vice President - Administration effective July 1997, after serving as Vice President
Administration and General Counsel since
November 1994. He joined the Company in April
1992 as General Counsel.

TODD J. TESKE, 34 Mr. Teske was elected to his current position in
Controller October 1998, after serving as Assistant Controller
since joining the Company in June 1996. He held the
position of Audit Manager at Arthur Andersen LLP,
a public accounting firm, from 1992 to 1996.

GERALD E. ZITZER, 52 Mr. Zitzer was elected to his current position in
Vice President - Human Resources November 1988.
</TABLE>

(1) Officer is also a Director of the Company.

(2) Member of Executive Committee.

(3) Member of Planning Committee.

Officers are elected annually and serve until they resign, die, are removed, or
a different person is appointed to the office.

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

Information required by this Item is incorporated by reference to "Quarterly
Financial Data, Dividend and Market Information" on page 27.

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ITEM 6. SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
Fiscal Year 1999 1998 1997 1996 1995
- -----------------------------------------------------------------------------------------------------------------
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C>
SUMMARY OF OPERATIONS
NET SALES .......................... $1,501,726 $1,327,610 $1,316,413 $1,287,029 $1,339,677
GROSS PROFIT ON SALES .............. 305,355 254,674 221,216 261,748 271,618
PROVISION FOR INCOME TAXES ......... 63,670 42,500 37,740 56,640 65,570
NET INCOME ......................... 106,101 70,645 61,565 92,412 104,805
PER SHARE OF COMMON STOCK:
Basic Earnings ................... 4.55 2.86 2.16 3.19 3.62
Diluted Earnings ................. 4.52 2.85 2.15 3.18 3.61
Cash Dividends ................... 1.16 1.12 1.09 1.05 .98
Shareholders' Investment ......... $ 15.77 $ 13.28 $ 13.82 $ 17.30 $ 15.19
WEIGHTED AVERAGE NUMBER OF SHARES
OF COMMON STOCK OUTSTANDING ....... 23,344 24,666 28,551 28,927 28,927
DILUTED NUMBER OF SHARES OF
COMMON STOCK OUTSTANDING .......... 23,459 24,775 28,678 29,059 29,072

OTHER DATA
SHAREHOLDERS' INVESTMENT ........... $ 365,910 $ 316,488 $ 351,097 $ 500,505 $ 439,478
LONG-TERM DEBT ..................... 113,307 128,102 142,897 60,000 75,000
TOTAL ASSETS ....................... 875,885 793,409 842,189 838,164 798,493
PLANT AND EQUIPMENT ................ 859,848 812,428 796,714 776,638 726,331
PLANT AND EQUIPMENT, NET OF RESERVES 404,454 391,927 396,266 374,212 343,297
PROVISION FOR DEPRECIATION ......... 49,346 47,511 43,345 43,032 44,445
EXPENDITURES FOR PLANT AND EQUIPMENT 65,998 45,893 71,262 77,746 131,034
WORKING CAPITAL .................... $ 176,644 $ 159,101 $ 204,422 $ 266,208 $ 256,075
Current Ratio .................... 1.6 to 1 1.7 to 1 2.0 to 1 2.4 to 1 2.3 to 1
NUMBER OF EMPLOYEES AT YEAR END .... 7,994 7,265 7,661 7,199 6,958
NUMBER OF SHAREHOLDERS AT YEAR END . 4,628 4,911 5,336 5,879 6,792
QUOTED MARKET PRICE:
High ............................. $ 70-15/16 $ 53-3/8 $ 53-5/8 $ 46-7/8 $ 39-1/4
Low .............................. $ 33-11/16 $ 36-7/8 $ 36-1/2 $ 32-3/4 $ 30-1/2
</TABLE>

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

FISCAL 1999 COMPARED TO FISCAL 1998

Sales

Net sales for fiscal 1999 totaled $1,502 million, an increase of $174 million or
13% when compared to the prior year. This increase was due to a $120 million
increase in sales dollars resulting from an 8% increase in unit shipments, a
favorable mix change in engines sold of $38 million and $16 million from
increased prices.

Gross Profit

The gross profit margin increased to 20% in the 1999 fiscal year from 19% in the
preceding year. This increase resulted primarily from the following factors: $16
million of price increases, $15 million attributed to the benefit of higher
production during the year and $14 million in lower costs for purchased parts
and engines and raw material. Lower aluminum costs, the major raw material used
in engines, accounted for $8 million of the lower raw material costs. Offsetting
these improvements were a mix shift to lower margin engines of $22 million and
inefficiencies of $3 million caused by operating plants at full capacity.

Engineering, Selling, General and Administrative Expenses

Engineering, selling, general and administrative expenses for fiscal 1999
decreased 4% or $5 million compared to fiscal 1998. This decrease was primarily
due to a $10 million decrease in costs related to the Company's POWERCOM
software business that was sold in the first quarter of this fiscal year. Costs
related to implementing the Company's new enterprise-wide information system
decreased $2 million between the fiscal years. Offsetting these reductions in
costs was a $4 million increase in profit sharing expenses due to improved
results and a $1 million increase in research and development expenses.

Interest Expense

Interest expense decreased 12% or $2 million for the 1999 fiscal year compared
to the 1998 fiscal year. This decrease was the result of $15 million repayment
of long-term debt at the end of the 1998 fiscal year and lower average interest
rates on working capital borrowings throughout the year.

Provision for Income Taxes

The effective tax rate decreased to 37.5% in 1999 from 37.6% in the previous
year due to lower state income taxes and reductions in other related items.

FISCAL 1998 COMPARED TO FISCAL 1997

Sales

Net sales for fiscal 1998 totaled $1,328 million, up 1% or $11 million from the
preceding year. This increase resulted primarily from a $34 million increase in
sales dollars due to a 3% increase in engine unit shipments and a $6 million
increase in service parts sales due to increased demand. These increases were
partially offset by a $19 million decrease in sales dollars due to a mix change
to lower horsepower, lower priced engines and a $10 million decrease in revenue
from European customers with whom the Company shares currency risk.

Gross Profit

The gross profit margin for the 1998 fiscal year increased to 19% from 17% in
the 1997 fiscal year. The primary reason for this favorable change was the lack
of the $37 million charge related to an early retirement window. There was also
a $2 million increase due to improvements in manufacturing productivity. These
were offset by the $10 million in lost gross profit due to the reduced revenue
from European customers described above.

Engineering, Selling, General and Administrative Expenses

Engineering, selling, general and administrative expenses increased $12 million
or 11% between years. This increase was caused primarily by the costs associated
with the new enterprise-wide information system which totaled $7 million
(discussed later) and increased costs of new venture activities which totaled $7
million, of which $4 million related to the Company's POWERCOM software
business.

Interest Expense

Interest expense for the 1998 fiscal year was $9 million higher than in 1997.
This resulted from using increased domestic short-term borrowings to finance
seasonal increases in accounts receivable and inventories during the year and an
increase in long-term debt over the preceding year. Seasonal borrowings were
paid off by the end of the fiscal year.

Provision for Income Taxes

The effective tax rate decreased to 37.6% in 1998 from 38.0% in the previous
year. This was due

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primarily to reductions in the foreign tax provision and in other tax related
items that were individually insignificant.

LIQUIDITY AND CAPITAL RESOURCES

FISCAL YEARS 1999, 1998 AND 1997

Cash flow from operating activities was $114 million, $136 million and $143
million, in fiscal 1999, 1998 and 1997, respectively. The primary source of
funds was from net income excluding depreciation. The significant change between
fiscal 1999 and fiscal 1998 amounts was due to changes in working capital as
explained below.

The fiscal 1999 cash flow from operating activities reflects improved net
income, excluding depreciation, of $37 million. Offsetting it is an increased
requirement for operating capital of $60 million, caused primarily by strong
fourth quarter business which increased year-end receivables and a restoration
of inventories to higher year-end levels.

The fiscal 1998 cash flow from operating activities reflects a $7 million
increase in accounts receivable and an $18 million decrease in inventories
resulting from increased sales late in the last fiscal quarter.

The fiscal 1997 cash flow from operating activities reflects an increase in
accounts receivable of $11 million and lower inventories of $11 million
resulting from increased sales at the end of the fiscal year when compared to
the previous year. Also, increased accounts payable of $17 million caused by the
timing of payments, increased accrued liabilities of $5 million resulting
primarily from increased profit sharing provisions, and increased federal and
state income taxes payable of $4 million caused by the timing of payments, all
contributed to the cash flows of the Company.

Net cash used in investing activities amounted to $65 million, $45 million and
$51 million in fiscal 1999, 1998 and 1997, respectively. Cash flows used in
investing activities included additions to plant and equipment of $66 million,
$46 million and $71 million in fiscal 1999, 1998 and 1997, respectively. The
fiscal 1999 and 1997 capital expenditures related primarily to reinvestment in
equipment and new products. The fiscal 1998 capital expenditures principally
related to investment in equipment. The 1997 cash flows from investing
activities also included $16 million related to the sale of the Menomonee Falls,
Wisconsin facility. The sale of this facility is described under "Other
Matters."

Net cash used in financing activities amounted to $73 million, $119 million and
$129 million in fiscal 1999, 1998 and 1997, respectively. These financing
activities included the repurchase of the Company's common stock, totaling $75
million in 1999, $86 million in 1998 and $180 million in 1997. In each of the
fiscal years, $15 million was paid on the 9.21% Senior Notes due 2001. Cash
dividends totaled $27 million, $28 million and $31 million in fiscal 1999, 1998
and 1997, respectively. The cash dividends paid decreased from the preceding
year because the common stock repurchase program resulted in less stock
outstanding. In fiscal 1997, the Company issued ten-year notes which resulted in
$98 million of net proceeds from the offering. Proceeds from the exercise of
stock options amounted to $45 million in 1999, substantially higher than in
prior years due to increased option activity.

Future Liquidity and Capital Resources

The Company has in place a $250 million revolving credit facility to be used to
fund seasonal working capital requirements and other financing needs. This
credit facility expires in April 2002 and contains certain restrictive
covenants. Because the Company plans to use available cash to finance capacity
expansions in fiscal 2000 and 2001, the Company will continue to utilize
borrowings under the revolving credit facility to fund working capital needs.
Accordingly, interest expense should stay approximately the same between years.

In April 1999, the Company's Board of Directors approved capital expenditures of
$95 million for fiscal 2000. Of this, the Company expects to spend approximately
$75 million in fiscal 2000, with the remainder spent in fiscal 2001. These
anticipated expenditures include a significant amount for capacity increases, as
well as, continuing investment in equipment and new products.

In May 1997, the Company filed a shelf registration for $175 million of debt
securities to be issued periodically. Of this, $75 million has not yet been
issued on the registration statement. The Company may decide to offer all or
part of the remaining securities depending on many factors, including general
economic conditions or cash required for operations.

Management believes that available cash, the credit facility, cash generated
from operations, existing lines of credit and access to public debt markets will
be adequate to fund the Company's capital requirements for the foreseeable
future.

8
<PAGE> 11

FINANCIAL STRATEGY

Management of the Company subscribes to the premise 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 the Company's cost of capital. Given this
belief, the Company implemented this financial strategy by means of a "dutch
auction" tender offer (described below) and a public debt offering in fiscal
1997. The Company also continued the repurchase of its outstanding common stock
in the open market in fiscal 1999 and 1998. The Company believes this will
provide a capital structure that makes greater use of financial leverage without
imposing excessive risk on either the Company's shareholders or creditors. The
Company also believes that the substitution of lower (after-tax) cost debt for
equity in its permanent capital structure will reduce its overall cost of
capital and that its profitability and strong cash flows will accommodate the
increased use of debt without impairing its ability to finance growth or
increase cash dividends per share on its common stock.

The share repurchase program authorized by the Board of Directors in fiscal 1997
for $300 million of its common stock was completed in the second quarter of
fiscal 1999. In January 1999, the Board of Directors approved a repurchase of up
to 1.3 million additional shares of the Company's common stock in open market or
private transactions. Under this authorization, stock repurchases totaling .7
million shares were made in the second half of the year in open market
transactions. The latest share repurchase authorization is intended to minimize
dilution from shares issued for employee benefit plans and will be funded from
available cash.

Also as a part of its financial strategy, subject to the discretion of its Board
of Directors and the requirements of applicable law, the Company currently
intends to increase future cash dividends per share at a rate approximating the
inflation rate.

OTHER MATTERS

Year 2000 Issues

The Company is continuing implementation of an overall comprehensive Year 2000
Readiness Program to address year 2000 issues. This program is based on the
Automotive Industry Action Group's model system consisting of five steps:
Awareness; Inventory and Assessment; Remediation; Testing; and Readiness
Certification. Progress is reported to the Company's Board of Directors
regularly.

The Company completed implementation of its new enterprise-wide information
system in January of 1999. All business transactions are being processed on the
new system which addresses the great majority of information technology year
2000 computer issues. Other internal year 2000 issues not directly related to
the previously described project are being addressed and tested. These are
expected to be completed by October of 1999.

Project expenditures to date total $33 million. The Company expects any
additional incremental costs to be immaterial.

The Company completed assessment of its non-information technology systems. An
outside auditor was utilized to review these systems. The vast majority of
remedial activities have been completed without material incremental costs. All
remedial activities are expected to be completed by October 1999.

Random testing of both information and non-information systems has been
conducted and will continue to be conducted until the end of the calendar year
in order to ensure year 2000 readiness.

The Company's largest customers have certified that they will be year 2000
compliant before the end of calendar year 1999 as to their relationships with
the Company. The Company's vendors and financial institutions have also been
surveyed for year 2000 readiness. Contingency plans have been developed to
ensure that the Company will be able to continue operations for up to three days
without deliveries. The Company will not be open for operations from December
31, 1999 to January 3, 2000. All major financial institutions have provided the
Company with year 2000 preparedness statements.

The Company will utilize its December 31, 1999 to January 3, 2000 shutdown
period to back up its systems, re-start those systems and resolve any open
issues.

The last payroll for calendar year 1999 will be issued on December 29, 1999 and
all arrangements for payment of the January 3, 2000 dividend payment will be
made prior to December 31, 1999.

The Company believes its Year 2000 Program is adequate to detect in advance year
2000 compliance issues, and that it has the necessary resources to remedy them.
However, the year 2000 problem has many aspects and potential consequences, some
of which are not reasonably foreseeable, and there can be no assurance that
unforeseen consequences will not arise.

9
<PAGE> 12

Emissions

The U.S. Environmental Protection Agency (EPA) has developed national emission
standards under a two phase process for small air cooled engines. The Company
currently has a complete product offering which complies with EPA's Phase I
engine emission standards. The EPA finalized its Phase II emission standards in
March of 1999. The Phase II program will impose more stringent standards over
the useful life of the engine and will be phased in from 2001 to 2005 for Class
II (225 or greater cubic centimeter displacement) engines and from 2003 to 2008
for Class I (under 225 cubic centimeter displacement) engines. The Company does
not believe compliance with the new standards will have a material adverse
effect on its financial position or results of operations.

The Company submitted a supplemental compliance plan to the California Air
Resources Board (CARB), as required of companies which sell more than a
threshold number of Class I engines into California. The objective of the plan
is to achieve additional reductions in extreme non-attainment areas. While
CARB's aggressive program will result in a reduced product offering by the
Company in California, the Company does not believe the California program will
have a material effect on the financial condition or results of operations of
the Company.

Sale of the Menomonee Falls, Wisconsin Facility

The sale of the Company's Menomonee Falls, Wisconsin facility for approximately
$16.0 million was completed during fiscal 1997. The provisions of the contract
state that the Company will continue to own and occupy the warehouse portion of
the facility for a period of up to ten years (the "Reservation Period"). The
contract also contains a buyout clause, at the buyer's option and under certain
circumstances, of the remaining Reservation Period. Under the provisions of
Statement of Financial Accounting Standards No. 66, "Accounting for Sales of
Real Estate," the Company is required to account for this as a financing
transaction as the Company continues to have substantial involvement with the
facility during the Reservation Period or until the buyout option is exercised.
Under this method, the cash received is reflected as a deferred revenue, and the
assets and the accumulated depreciation remain on the Company's books.
Depreciation expense continues to be recorded each period, and imputed interest
expense is also recorded and added to deferred revenue. Offsetting this is the
fair value lease income on the non-Company occupied portion of the building. A
pretax gain, which will be recognized at the earlier of the exercise of the
buyout option or the expiration of the Reservation Period, is estimated to be
$10 million to $12 million. The annual cost of operating the warehouse portion
of the facility is not material.

New Accounting Pronouncements

In June 1998 the Financial Accounting Standards Board issued Financial
Accounting Standard (FAS) No. 133 "Accounting for Derivative Instruments and
Hedging Activities". This new standard as amended will be effective for the
Company in fiscal 2001, and requires companies to record derivatives on the
balance sheet as assets or liabilities, measured at fair value. Any fair value
changes will be recorded in net income or comprehensive income. The Company does
not expect that the adoption of this standard will have a material effect on the
results of operations.

Subsequent Event - Disposition of Foundry Assets

Effective August 23, 1999, the Company contributed certain assets related to its
foundry operations to a third party. In exchange for this contribution, the
Company received $23.6 million of cash and preferred stock with a face value of
$45 million. The provisions of the preferred stock include a 15% cumulative
dividend and is convertible into at least 31% of the common stock of the third
party. The disposition will result in a gain.

10
<PAGE> 13

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to market risk from changes in foreign exchange and
interest rates. To reduce the risk from changes in foreign exchange rates, the
Company selectively uses financial instruments. The Company does not hold or
issue financial instruments for trading purposes.

FOREIGN CURRENCY

The Company's earnings are affected by fluctuations in the value of the U.S.
dollar against foreign currencies primarily as a result of purchasing engines
from its Japanese joint venture. The Company's foreign subsidiaries' earnings
are also influenced by fluctuations of the local currency against the U.S.
dollar as these subsidiaries purchase inventory from the parent in U.S. dollars.
Forward foreign exchange contracts are used to partially hedge against the
earnings effects of such fluctuations. At June 27, 1999, the Company had the
following forward foreign exchange contracts outstanding at the Fair Value Gains
and (Losses) shown (in thousands):

Notional U.S. Fair Value
Currency Value Dollars Gains and (Losses)
- -------- ----- ------- ------------------
<S> <C> <C> <C>
Japanese Yen 2,426,000 20,400 ($265)
Australian Dollars 10,000 6,400 (288)
Canadian Dollars 2,000 1,300 9
</TABLE>

All of the above contracts expire in less than one year.

Although the Company sells its domestically produced engines to foreign
customers in U.S. dollars, the Company has shared some of the currency risk with
customers for certain sales transactions. Accordingly, the Company is exposed to
fluctuations in foreign exchange rates, primarily related to the U.S.
dollar/Euro rate. Historically, the Company has managed these risks through
limitations on the amount of sharing provided to customers. These programs are
generally for one year.

Fluctuations in currency exchange rates may also impact the stockholders' equity
of the Company. Amounts invested in the Company's non-U.S. subsidiaries are
translated into U.S. dollars at the exchange rates in effect at year end. The
resulting translation adjustments are recorded in stockholders' equity as
cumulative translation adjustments. The cumulative translation adjustments
component of stockholders' equity decreased $0.2 million during the year. Using
the year-end exchange rates, the total amount invested in subsidiaries at June
27, 1999 was approximately $19.1 million.

INTEREST RATES

The Company is exposed to interest rate fluctuations on its borrowings. The
Company manages its interest rate exposure through a combination of fixed and
variable rate debt. Depending on general economic conditions, the Company has
typically used variable rate debt for short-term borrowings and fixed rate debt
for longer-term borrowings.

At June 27, 1999, the Company had the following short-term loans outstanding
(amount in thousands):
<TABLE>
<CAPTION>
Average Annual
Currency Amount Interest Rate
- -------- ------ -------------
<S> <C> <C>
German Mark 20,519 5.25%
Dutch Guider 1,488 5.00%
Canadian Dollars 2,971 5.51%
Swedish Krona 1,000 8.05%
French Franc 200 5.19%
U.S. Dollars 4,335 5.31%
</TABLE>

All of the above loans carry variable interest rates.

Long-term loans consisted of the following (amounts in thousands):

<TABLE>
<CAPTION>
Description Amount Maturity
- ----------- ------ --------
<S> <C> <C>
9.21% Senior Notes $30,000 $15,000 in Fiscal 2000 and
2001
7.25% Notes 98,307 2007
</TABLE>

Each of the above loans carries a fixed rate of interest.

11
<PAGE> 14
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
CONSOLIDATED BALANCE SHEETS
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
AS OF JUNE 27, 1999 AND JUNE 28, 1998
- --------------------------------------------------------------------------------
(in thousands)

<TABLE>
<CAPTION>
ASSETS 1999 1998
---- ----
CURRENT ASSETS:
<S> <C> <C>
Cash and Cash Equivalents................................................. $ 60,806 $ 84,527
Receivables, Less Reserves of $1,516 and $1,537, Respectively............. 194,096 136,629
Inventories -
Finished Products and Parts............................................. 72,196 58,975
Work in Process......................................................... 59,665 45,217
Raw Materials........................................................... 5,587 3,684
-------- --------
Total Inventories..................................................... 137,448 107,876
Future Income Tax Benefits................................................ 34,383 31,287
Prepaid Expenses.......................................................... 32,413 21,727
-------- --------
Total Current Assets.................................................. 459,146 382,046
MARKETABLE SECURITIES...................................................... 2,730 -
DEFERRED INCOME TAX ASSETS................................................. 2,039 9,555
CAPITALIZED SOFTWARE....................................................... 7,516 9,881
PLANT AND EQUIPMENT:
Land and Land Improvements................................................ 16,024 15,781
Buildings................................................................. 151,035 148,868
Machinery and Equipment................................................... 651,129 630,043
Construction in Progress.................................................. 41,660 17,736
-------- --------
859,848 812,428
Less - Accumulated Depreciation........................................... 455,394 420,501
-------- --------
Total Plant and Equipment, Net........................................ 404,454 391,927
-------- --------
$875,885 $793,409
======== ========
</TABLE>

The accompanying notes to consolidated financial statements are an integral part
of these statements.

<PAGE> 15

- --------------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' INVESTMENT 1999 1998
---- ----
CURRENT LIABILITIES:
<S> <C> <C>
Accounts Payable...................................................... $ 117,757 $ 76,915
Domestic Notes Payable................................................ 4,335 4,700
Foreign Loans......................................................... 13,824 14,336
Current Maturities on Long-Term Debt.................................. 15,000 15,000
Accrued Liabilities -
Wages and Salaries.................................................. 38,744 29,502
Warranty............................................................ 36,978 29,565
Other............................................................... 43,963 42,398
--------- ---------
Total Accrued Liabilities......................................... 119,685 101,465
Federal and State Income Taxes........................................ 11,901 10,529
--------- ---------
Total Current Liabilities......................................... 282,502 222,945
DEFERRED REVENUE ON SALE OF PLANT AND EQUIPMENT......................... 15,798 15,893
ACCRUED PENSION COST.................................................... 17,306 26,477
ACCRUED EMPLOYEE BENEFITS............................................... 13,185 12,571
ACCRUED POSTRETIREMENT HEALTH CARE OBLIGATION........................... 67,877 70,933
LONG-TERM DEBT.......................................................... 113,307 128,102
COMMITMENTS AND CONTINGENCIES...........................................
SHAREHOLDERS' INVESTMENT
Common Stock-
Authorized 60,000 Shares $.01 Par Value,
Issued 28,927 in 1999 and 1998.................................... 289 289
Additional Paid-In Capital............................................ 37,657 37,776
Retained Earnings..................................................... 612,807 533,805
Accumulated Other Comprehensive Income................................ (1,732) (2,110)
Unearned Compensation on Restricted Stock............................. (235) --
Treasury Stock at cost,
5,727 Shares in 1999 and 5,103 in 1998.............................. (282,876) (253,272)
--------- ---------
Total Shareholders' Investment.................................... 365,910 316,488
--------- ---------
$ 875,885 $ 793,409
========= =========
</TABLE>

The accompanying notes to consolidated financial statements are an integral part
of these statements.

13
<PAGE> 16

CONSOLIDATED STATEMENTS OF EARNINGS
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
FOR THE YEARS ENDED JUNE 27, 1999, JUNE 28, 1998 AND JUNE 29, 1997
- --------------------------------------------------------------------------------
(in thousands, except per share data)

<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
NET SALES........................................ $1,501,726 $1,327,610 $1,316,413
COST OF GOODS SOLD............................... 1,196,371 1,072,936 1,095,197
---------- ---------- ----------
Gross Profit on Sales......................... 305,355 254,674 221,216
ENGINEERING, SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES......................... 125,219 129,986 117,497
---------- ---------- ----------
Income from Operations........................ 180,136 124,688 103,719
INTEREST EXPENSE................................. (17,024) (19,352) (9,880)
OTHER INCOME, Net................................ 6,659 7,809 5,466
---------- ---------- ----------
Income Before Provision for Income Taxes...... 169,771 113,145 99,305
PROVISION FOR INCOME TAXES....................... 63,670 42,500 37,740
---------- ---------- ----------
NET INCOME....................................... $ 106,101 $ 70,645 $ 61,565
========== ========== ==========
Average Shares Outstanding.................... 23,344 24,666 28,551
BASIC EARNINGS PER SHARE......................... $ 4.55 $ 2.86 $ 2.16
========== ========== ==========
Diluted Average Shares Outstanding............ 23,459 24,775 28,678
DILUTED EARNINGS PER SHARE....................... $ 4.52 $ 2.85 $ 2.15
========== ========== ==========
</TABLE>

The accompanying notes to consolidated financial statements are an integral part
of these statements.

14
<PAGE> 17
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' INVESTMENT

Accumulated
Additional Other
Common Paid-In Retained Comprehen-
Stock Capital Earnings sive Income
------ ---------- -------- ------------
<S> <C> <C> <C> <C>
BALANCES, JUNE 30, 1996 $289 $40,898 $459,666 $ (348)
Comprehensive Income -
Net Income - - 61,565 -
Foreign Currency Translation
Adjustments - - - (685)

Total Comprehensive Income - - - -

Cash Dividends Paid
($1.09 per share) - - (30,549) -
Purchase of Common Stock
for Treasury - - - -
Exercise of Stock Options - (365) - -
-------------------------------------------------------------------------
BALANCES, JUNE 29, 1997 $289 $40,533 $490,682 $(1,033)
Comprehensive Income -
Net Income - - 70,645 -
Foreign Currency Translation
Adjustments - - - (1,077)

Total Comprehensive Income - - - -

Cash Dividends Paid
($1.12 per share) - - (27,522) -
Purchase of Common Stock
for Treasury - - - -
Exercise of Stock Options - (2,757) - -
-------------------------------------------------------------------------
BALANCES, JUNE 28, 1998 $289 $37,776 $533,805 $(2,110)
Comprehensive Income -
Net Income - - 106,101 -
Foreign Currency Translation
Adjustments - - - (199)
Unrealized Gain on Marketable
Securities, net of tax of $368 - - - 577

Total Comprehensive Income - - - -

Cash Dividends Paid
($1.16 per share) - - (27,099) -
Purchase of Common Stock
for Treasury - - - -
Exercise of Stock Options - (13) - -
Restricted Stock Issued - (106) - -
Amortization of Unearned
Compensation - - - -
-------------------------------------------------------------------------
BALANCES, JUNE 27, 1999 $289 $37,657 $612,807 $(1,732)
=========================================================================

Unearned
Compensation
on Restricted Treasury Comprehensive
Stock Stock Income
------------- -------- -------------
<S> <C> <C> <C>
BALANCES, JUNE 30, 1996 $ - $ -
Comprehensive Income -
Net Income - - $ 61,565
Foreign Currency Translation
Adjustments - - (685)
--------
Total Comprehensive Income - - $ 60,880
========
Cash Dividends Paid
($1.09 per share) - -
Purchase of Common Stock
for Treasury - (179,924)
Exercise of Stock Options - 550
----------------------------
BALANCES, JUNE 29, 1997 $ - $(179,374)
Comprehensive Income -
Net Income - - $ 70,645
Foreign Currency Translation
Adjustments - - (1,077)
--------
Total Comprehensive Income - - $ 69,568
========
Cash Dividends Paid
($1.12 per share) - -
Purchase of Common Stock
for Treasury - (85,943)
Exercise of Stock Options - 12,045
----------------------------
BALANCES, JUNE 28, 1998 $ - $(253,272)
Comprehensive Income -
Net Income - - $106,101
Foreign Currency Translation
Adjustments - - (199)
Unrealized Gain on Marketable
Securities, net of tax of $368 - - 577
--------
Total Comprehensive Income - - $106,479
========
Cash Dividends Paid
($1.16 per share) - -
Purchase of Common Stock
for Treasury - (75,141)
Exercise of Stock Options - 45,143
Restricted Stock Issued (288) 394
Amortization of Unearned
Compensation 53 -
----------------------------
BALANCES, JUNE 27, 1999 $ (235) $(282,876)
============================

</TABLE>

The accompanying notes to consolidated financial statements are an integral part
of these statements.

<PAGE> 18

CONSOLIDATED STATEMENTS OF CASH FLOW

<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----

<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 106,101 $ 70,645 $ 61,565
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities -
Depreciation and Amortization 49,604 47,716 43,362
Loss on Disposition of Plant and Equipment 2,355 1,973 1,608
Provision (Credit) for Deferred Income Taxes 4,052 7,735 (16,105)
Change in Operating Assets and Liabilities -
Increase in Receivables (58,738) (6,752) (10,531)
(Increase) Decrease in Inventories (29,570) 18,081 11,446
Increase in Prepaid Expenses (10,805) (3,606) (2,396)
Increase in Accounts Payable,
Accrued Liabilities and Income Taxes 61,697 8,274 25,378
Other, Net (10,748) (7,676) 28,590
--------- --------- ---------
Net Cash Provided by Operating Activities 113,948 136,390 142,917
--------- --------- ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to Plant and Equipment (65,998) (45,893) (71,262)
Proceeds Received on Sale of Plant and Equipment 1,142 620 4,133
Proceeds Received on Sale of Menomonee Falls,
Wisconsin Facility -- -- 15,966
--------- --------- ---------
Net Cash Used in Investing Activities (64,856) (45,273) (51,163)
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (Repayments) Borrowings on Loans and Notes Payable (401) 677 (1,563)
Net Borrowings on 7.25% Notes Due 2007 -- -- 97,880
Repayment on 9.21% Senior Notes Due 2001 (15,000) (15,000) (15,000)
Cash Dividends Paid (27,099) (27,522) (30,549)
Purchase of Common Stock for Treasury (75,141) (85,943) (179,924)
Proceeds from Exercise of Stock Options 45,130 9,288 185
--------- --------- ---------
Net Cash Used in Financing Activities (72,511) (118,500) (128,971)
--------- --------- ---------
EFFECT OF FOREIGN CURRENCY EXCHANGE RATE
CHANGES ON CASH AND CASH EQUIVALENTS (302) (949) (563)
--------- --------- ---------
NET DECREASE IN CASH AND
CASH EQUIVALENTS (23,721) (28,332) (37,780)
CASH AND CASH EQUIVALENTS:
Beginning of Year 84,527 112,859 150,639
--------- --------- ---------
End of Year $ 60,806 $ 84,527 $ 112,859
========= ========= =========
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION:
Interest Paid $ 17,025 $ 17,989 $ 9,298
========= ========= =========
Income Taxes Paid $ 54,491 $ 33,352 $ 49,707
========= ========= =========

</TABLE>

The accompanying notes to consolidated financial statements are an integral part
of these statements.

16
<PAGE> 19
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

(1) NATURE OF OPERATIONS:
Briggs & Stratton Corporation (the Company) is a U.S. based producer of air
cooled gasoline engines. These engines are sold primarily to original equipment
manufacturers of lawn and garden equipment and other gasoline engine powered
equipment worldwide.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Fiscal Year: The Company's fiscal year consists of 52 or 53 weeks, ending on the
Sunday nearest the last day of June in each year. Therefore, the 1999, 1998 and
1997 fiscal years were 52 weeks long. All references to years relate to fiscal
years rather than calendar years.

Principles of Consolidation: The consolidated financial statements include the
accounts of Briggs & Stratton Corporation and its wholly owned domestic and
foreign subsidiaries after elimination of intercompany accounts and
transactions.

Accounting Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents: This caption includes cash, commercial paper and
certificates of deposit. The Company considers all highly liquid investments
purchased with a maturity of three months or less to be cash equivalents.

Inventories: Inventories are stated at cost, which does not exceed market. The
last-in, first-out (LIFO) method was used for determining the cost of
approximately 89% of total inventories at June 27, 1999, 88% at June 28, 1998
and 93% at June 29, 1997. The cost for the remaining portion of the inventories
was determined using the first-in, first-out (FIFO) method. If the FIFO
inventory valuation method had been used exclusively, inventories would have
been $43,900,000, $48,100,000 and $48,894,000 higher in the respective years.
The LIFO inventory adjustment was determined on an overall basis, and
accordingly, each class of inventory reflects an allocation based on the FIFO
amounts.

Marketable Securities: This caption represents stock received in the sale of the
Company's POWERCOM software business at the end of the first quarter of fiscal
1999. These securities are being classified as available-for-sale and are being
reported at fair market value. The unrealized gain incurred on this stock is
recorded as Unrealized Gain on Marketable Securities in the Shareholders'
Investment section of the balance sheet.

Capitalized Software: This caption represents costs of software used in the
Company's business. Amortization of Capitalized Software is computed on an
item-by-item basis over a period of three to ten years, depending on the
estimated useful life of the software. Accumulated amortization amounted to
$5,655,000 as of June 27, 1999, and $7,137,000 as of June 28, 1998. Included in
the 1998 fiscal year ending balance is $1,891,000 of amortization related to the
Company's software business, which was sold in the first quarter of fiscal 1999.

Plant and Equipment and Depreciation: Plant and equipment is stated at cost, and
depreciation is computed using the straight-line method at rates based upon the
estimated useful lives of the assets.

Expenditures for repairs and maintenance are charged to expense as incurred.
Expenditures for major renewals and betterments, which significantly extend the
useful lives of existing plant and equipment, are capitalized and depreciated.
Upon retirement or disposition of plant and equipment, the cost and related
accumulated depreciation are removed from the accounts and any resulting gain or
loss is recognized in other income.

Deferred Revenue on Sale of Plant & Equipment: The sale of the Company's
Menomonee Falls, Wisconsin facility for approximately $16.0 million was
completed at the beginning of the fiscal quarter ended December 29, 1996. The
provisions of the contract state that the Company will continue to own and
occupy the warehouse portion of the facility for

17
<PAGE> 20
NOTES ....
- --------------------------------------------------------------------------------

a period of up to ten years (the "Reservation Period"). The contract also
contains a buyout clause, at the buyer's option and under certain circumstances,
of the remaining Reservation Period. Under the provisions of Statement of
Financial Accounting Standards (FAS) No. 66, "Accounting for Sales of Real
Estate," the Company is required to account for this as a financing transaction
as the Company continues to have substantial involvement with the facility
during the Reservation Period or until the buyout option is exercised. Under
this method, the cash received is reflected as a deferred revenue, and the
assets and the accumulated depreciation remain on the Company's books.
Depreciation expense continues to be recorded each period, and imputed interest
expense is also recorded and added to deferred revenue. Offsetting this is the
imputed fair value lease income on the non-Company occupied portion of the
building. A pretax gain, which will be recognized at the earlier of the exercise
of the buyout option or the expiration of the Reservation Period, is estimated
to be $10 million to $12 million. The annual cost of operating the warehouse
portion of the facility is not material.

Accrued Employee Benefits: The Company's life insurance program includes payment
of a death benefit to beneficiaries of retired employees. The Company accrues
for the estimated cost of these benefits over the estimated working life of the
employee. Past service costs for all retired employees have been fully provided
for. The Company also accrues for the estimated cost of supplemental retirement
and death benefit agreements with executive officers.

Income Taxes: The Provision for Income Taxes includes Federal, state and foreign
income taxes currently payable and those deferred or prepaid because of
temporary differences between the financial statement and tax basis of assets
and liabilities. The Future Income Tax Benefits represent temporary differences
relating to current assets and current liabilities and the Deferred Income Tax
Assets represent temporary differences relating to noncurrent assets and
liabilities.

Research and Development Costs: Expenditures relating to the development of new
products and processes, including significant improvements and refinements to
existing products, are expensed as incurred. The amounts charged against income
were $17,920,000 in 1999, $19,950,000 in 1998 and $19,525,000 in 1997. Included
in the fiscal 1998 and fiscal 1997 amounts were software development costs
related to the Company's software business of $3,136,000 and $1,968,000,
respectively.

Advertising Costs: Advertising costs, included in Engineering, Selling, General
and Administrative Expenses on the accompanying Consolidated Statement of
Earnings, are expensed as incurred. These expenses totaled $7,724,000 in 1999,
$7,325,000 in 1998 and $7,989,000 in 1997.

Foreign Currency Translation: Foreign currency balance sheet accounts are
translated into United States dollars at the rates of exchange in effect at
fiscal year end. Income and expenses are translated at the average rates of
exchange in effect during the year. The related translation adjustments are made
directly to a separate component of Shareholders' Investment.

Earnings Per Share: The Company adopted Financial Accounting Standard No. 128
during the second quarter of 1998. The Company's earnings per share were
computed by dividing net income by the weighted average number of shares of
common stock outstanding during the period. Diluted earnings per share, for each
period presented, were computed on the assumption that stock options were
exercised at the beginning of the periods reported. The difference between
weighted average shares outstanding and diluted average shares outstanding
reflects the dilutive effects of stock options.

Earnings per share of common stock are computed based on the weighted average
number of shares outstanding during each period. The Company's ongoing share
repurchase program may affect the year-to-date comparisons.

Comprehensive Income: During fiscal 1999 the Company adopted Statement of
Financial Accounting Standard (FAS) No. 130, "Reporting Comprehensive Income".
This statement requires the reporting of comprehensive income in addition to net
income from operations. Comprehensive income is a more inclusive financial
reporting

18
<PAGE> 21

NOTES ...
- --------------------------------------------------------------------------------

method that includes disclosure of certain financial information that
historically has not been recognized in the calculation of net income. The
Company has chosen to report Comprehensive Income and Accumulated Other
Comprehensive Income which encomposes net income, unrealized gain on marketable
securities and foreign currency translation in the Consolidated Statement of
Shareholder's Investment.

Accumulated
Unrealized Other
Gain on Cumulative Compre-
Marketable Translation hensive
Securities Adjustments Income
---------- ----------- -----------
<S> <C> <C> <C>
Balance at June 30, 1996......... $ -- $ (348) $ (348)
Current year change.............. -- (685) (685)
---------- ----------- -----------
Balance at June 29, 1997......... -- (1,033) (1,033)
Current year change.............. -- (1,077) (1,077)
---------- ----------- -----------
Balance at June 28, 1998......... -- (2,110) (2,110)
Current year change.............. 577 (199) 378
---------- ----------- -----------
BALANCE AT JUNE 27, 1999......... $ 577 $ (2,309) $ (1,732)
========== =========== ===========
</TABLE>

Derivatives: The Company uses derivative financial instruments to manage its
foreign currency exposures. Gains and losses relating to hedges of probable
transactions with noncontrolled subsidiaries and third parties are deferred and
recognized as adjustments of carrying amounts when the transaction occurs. Gains
and losses on hedges of transactions that are not probable of occurring and
hedges of transactions with controlled subsidiaries are recognized in the
Company's results of operations.

(3) INCOME TAXES:

The provision for income taxes consists of the following (in thousands of
dollars):

Current 1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Federal....................... $ 51,344 $ 29,295 $ 45,474
State......................... 7,014 4,442 6,723
Foreign....................... 1,260 1,028 1,648
-------- -------- --------
59,618 34,765 53,845
Deferred........................ 4,052 7,735 (16,105)
-------- -------- --------
Total........................... $ 63,670 $ 42,500 $ 37,740
======== ======== ========
</TABLE>

A reconciliation of the U.S. statutory tax rates to the effective tax rates
follows:

1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
U.S. statutory rate................. 35.0% 35.0% 35.0%
State taxes, net of
Federal tax benefit............... 2.9% 3.1% 3.1%
Foreign Sales Corporation
tax benefit....................... (.5%) (.8%) (.9%)
Other............................... .1% .3% .8%
---- ---- ----
Effective tax rate.................. 37.5% 37.6% 38.0%
==== ==== ====
</TABLE>

The components of deferred tax assets and liabilities at the end of the fiscal
year were (in thousands of dollars):

1999 1998
-------- --------
Future Income Tax Benefits:

<S> <C> <C>
Inventory...................... $ 3,402 $ 2,212
Payroll related accruals....... 4,363 3,602
Warranty reserves.............. 14,421 11,531
Other accrued liabilities...... 12,026 11,542
Miscellaneous.................. 171 2,400
-------- --------
$ 34,383 $ 31,287
======== ========
<CAPTION>

1999 1998
-------- --------
Deferred Income Taxes:

<S> <C> <C>
Difference between book and
tax methods applied to
maintenance and supply
inventories................... $ 11,463 $ 11,198
Pension cost................... 3,345 7,137
Accumulated depreciation....... (56,131) (53,109)
Accrued employee benefits...... 9,142 8,529
Postretirement
health care obligation........ 26,472 27,664
Deferred revenue on sale
of plant & equipment.......... 6,161 6,198
Miscellaneous.................. 1,587 1,938
-------- --------
$ 2,039 $ 9,555
======== ========
</TABLE>

The Company has not recorded deferred income taxes applicable to undistributed
earnings of foreign subsidiaries that are indefinitely reinvested in foreign
operations. These undistributed earnings amounted to approximately $8,100,000 at
June 27, 1999. If these earnings were remitted to the U.S., they would be
subject to U.S. income tax. However, this tax would be substantially less than
the U.S. statutory income tax because of available foreign tax credits.

19
<PAGE> 22

NOTES...
- --------------------------------------------------------------------------------

(4) GEOGRAPHIC INFORMATION AND SIGNIFICANT CUSTOMERS:

The Company reviewed the criteria for determining segments of an operating
segment in accordance with FAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information" and concluded that it operates as one
segment. Geographic sales by the location in which the sale originated is as
follows (in thousands of dollars):

<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
United States.................. $1,422,988 $1,258,609 $1,252,359
All Other Countries............ 78,738 69,001 64,054
---------- ---------- ----------
Total.......................... $1,501,726 $1,327,610 $1,316,413
========== ========== ==========
</TABLE>

The Company has no material long lived assets in an individual foreign country.

In the fiscal years 1999, 1998 and 1997, there were sales to three major engine
customers that individually exceeded 10% of total Company net sales. The sales
to these customers are summarized below (in thousands of dollars and percent of
total Company sales):

1999 1998 1997
---- ---- ----
Customer Sales % Sales % Sales %
----- --- ----- --- ----- ---
<S> <C> <C> <C> <C> <C> <C>
A $250,755 17% $235,552 18% $282,428 21%
B 219,209 14% 203,931 15% 180,770 14%
C 161,857 11% 165,937 13% 142,840 11%
-------- -- -------- -- -------- --
$631,821 42% $605,420 46% $606,038 46%
======== == ======== == ======== ==
</TABLE>

(5) INDEBTEDNESS:

The Company has access to a $250,000,000 revolving credit facility (the Credit
Facility) which expires in April 2002. The Company also has access to additional
domestic lines of credit totaling $18,000,000 which remain in effect until
canceled by either party. They provide amounts for short-term use at the then
prevailing rate. There are no significant compensating balance requirements for
any of these lines, and there were no borrowings at June 27, 1999 using these
lines or the Credit Facility.

Borrowings under the Credit Facility by the Company bear interest at a rate per
annum equal to, at its option, either:

(1) the higher of (a) the bank's reference rate or (b) 0.5% per annum above the
Federal Funds rate; or

(2) LIBOR plus a margin that may be adjusted up or down based on the Company's
debt ratings.

The Credit Facility contains certain restrictive covenants that require the
Company to maintain certain financial conditions including a maximum limit on
the ratio of debt to capital and a minimum fixed charge coverage ratio. The
Credit Facility imposes limitations on liens, certain indebtedness, the sales of
assets and certain investments.

The following data relates to domestic notes payable (in thousands of dollars):

1999 1998
---- ----
<S> <C> <C>
Balance at
Fiscal Year End............... $ 4,335 $ 4,700

Weighted Average
Interest Rate at
Fiscal Year End............... 5.31% 5.94%
</TABLE>

The lines of credit available to the Company in foreign countries are in
connection with short-term borrowings and bank overdrafts used in the normal
course of business. These amounts total $9,960,000, expire at various times
through April, 2000 and are renewable. None of these arrangements had material
commitment fees or compensating balance requirements.

The following information relates to foreign loans (in thousands of dollars):

1999 1998
---- ----
<S> <C> <C>
Balance at
Fiscal Year End............... $ 13,824 $ 14,336

Weighted Average
Interest Rate at
Fiscal Year End............... 5.30% 4.97%
</TABLE>

The Long-Term Debt caption consists of the following (in thousands of dollars):

1999 1998
---- ----
<S> <C> <C>
9.21% Senior Notes Due 2001
at Face Amount................ $ 30,000 $ 45,000
7.25% Notes Due 2007, Net of
Unamortized Discount of
$1,693 in 1999 and
$1,898 in 1998................ 98,307 98,102
-------- --------
$128,307 $143,102

Less Current Maturities......... 15,000 15,000
-------- --------

Total Long-Term Debt.......... $113,307 $128,102
======== ========
</TABLE>

20
<PAGE> 23
NOTES ...
- --------------------------------------------------------------------------------

The 9.21% Senior Notes are due June 15, 2001. Payments on these notes are due in
five equal annual installments beginning in 1997. The notes include covenants
that limit total borrowings, require maintenance of a minimum net worth and set
certain restrictions on the sale or collateralizing of the Company's assets.

The 7.25% notes are due September 15, 2007. No principal payments are due before
that date. These notes have covenants that limit secured funded debt and certain
sale-leaseback transactions.

(6) OTHER INCOME:

The components of other income (expense) are (in thousands of dollars):

<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Interest income............. $ 1,993 $ 2,720 $ 3,981

Loss on the
disposition of
plant and equipment........ (2,355) (1,973) (1,608)

Income from joint
ventures................... 5,442 5,232 3,026

Other items................. 1,579 1,830 67
------- ------- -------
Total....................... $ 6,659 $ 7,809 $ 5,466
======= ======= =======
</TABLE>

(7) COMMITMENTS AND CONTINGENCIES:

The Company is a 50% guarantor on bank loans of three unconsolidated joint
ventures. They are in Japan for the manufacture of engines, in the United States
for the manufacture of parts and in India for the manufacture of engines and
parts. These bank loans totaled approximately $3,100,000 at the end of 1999.

Product and general liability claims arise against the Company from time to time
in the ordinary course of business. The Company is self-insured for future
claims up to $1 million per claim. Accordingly, a reserve is maintained for the
estimated costs of such claims. At June 27, 1999 and June 28, 1998, the reserve
for product and general liability claims was $6.8 million and $5.8 million,
respectively, based on available information. There is inherent uncertainty as
to the eventual resolution of unsettled claims. Management, however, believes
that any losses in excess of established reserves will not have a material
effect on the Company's financial condition or results of operations.

The Company has no material commitments for materials or capital expenditures at
June 27, 1999.

(8) STOCK OPTIONS:

The Company has a Stock Incentive Plan under which 3,361,935 shares of common
stock have been reserved for issuance. The Company accounts for the plan under
Accounting Principles Board Opinion No. 25, under which no compensation cost has
been recognized. Had compensation cost for these plans been determined
consistent with FAS No. 123, "Accounting for Stock-Based Compensation," the
Company's net income and earnings per share would have been reduced to the
following pro forma amounts:

<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Net Income (in thousands):
As Reported............. $106,101 $70,645 $61,565
Pro Forma............... $105,283 $69,574 $60,777

Basic Earnings Per Share:
As Reported............. $4.55 $2.86 $2.16
Pro Forma............... $4.51 $2.82 $2.13

Diluted Earnings Per Share:
As Reported............. $4.52 $2.85 $2.15
Pro Forma............... $4.49 $2.81 $2.12
</TABLE>

Because the FAS No. 123 method of accounting has not been applied to options
granted prior to July 2, 1995, the resulting pro forma compensation cost may not
be representative of that to be expected in future years.

Information on the options outstanding is as follows:

<TABLE>
<CAPTION>
Wtd. Avg.
Shares Ex. Price
------ ---------
<S> <C> <C>
Balance, June 30, 1996........... 1,704,531 $ 42.98
Granted during the year.......... 106,550 53.30
Exercised during the year........ (24,369) 17.26
---------
Balance, June 29, 1997........... 1,786,712 $ 43.95

Granted during the year.......... 241,980 65.69
Exercised during the year........ (236,873) 35.65
---------
Balance, June 28, 1998........... 1,791,819 $ 47.98

Granted during the year.......... 354,020 44.98
Exercised during the year........ (926,000) 45.30
Expired during the year.......... (177,828) 48.37
---------
Balance, June 27, 1999........... 1,042,011 $ 49.28
=========
</TABLE>

21
<PAGE> 24
NOTES ...
- --------------------------------------------------------------------------------

Grant Summary
- --------------------------------------------------------------------------------
Fiscal Grant Exercise Date Options Expiration
Year Date Price (a) Exercisable Outstanding Date
- ------ ----- --------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
1990 2-20-90 $13.014 50%, 1-1-94; 1,076 2-19-00
50%, 1-1-95
1991 2-19-91 14.524 50%, 1-1-95; 20,345 2-18-01
50%, 1-1-96
1992 5-18-92 21.525 50%, 1-1-96; 71,514 5-17-02
50%, 1-1-97
1995 8-12-94 45.854 8-12-97 31,514 8-12-99
1996 8-7-95 49.080 8-7-98 215,012 8-7-00
1997 8-6-96 53.300 8-6-99 106,550 8-6-01
1998 8-5-97 65.690 8-5-00 241,980 8-5-02
1999 8-5-98 44.980 8-5-01 354,020 8-5-03
</TABLE>

There were no options granted in fiscal 1993. Options granted in fiscal 1994
expired in fiscal 1999.

(a) Exercise prices of earlier grants have been adjusted as appropriate to
reflect a two-for-one stock split in October 1994 and the spin-off of the
Company's lock business in February 1995.

The fair value of each option is estimated using the Black-Scholes option
pricing model. The grant-date fair market value of the options and assumptions
used to determine such value are as follows:

<TABLE>
<CAPTION>
Options granted during 1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Grant date fair value......... $5.04 $5.98 $5.42

Assumptions:
Risk-free interest rates.... 5.4% 6.1% 6.3%
Expected volatility......... 22.3% 20.4% 20.6%
Expected dividend yield..... 2.5% 2.6% 2.5%
Expected term (in years).... 5.0 5.0 5.0
</TABLE>

(9) SHAREHOLDER RIGHTS PLAN:
On August 6, 1996, the Board of Directors declared a dividend distribution of
one common stock purchase right (a "right") for each share of the Company's
common stock outstanding on August 19, 1996. Each right would entitle
shareowners to buy one-half of one share of the Company's common stock at an
exercise price of $160.00 per full common share, subject to adjustment. The
rights are not currently exercisable, but would become exercisable if certain
events occurred relating to a person or group acquiring or attempting to acquire
15 percent or more of the outstanding shares of common stock. The rights expire
on August 19, 2006, unless redeemed or exchanged by the Company earlier.

(10) FOREIGN EXCHANGE RISK MANAGEMENT:
The Company enters into forward exchange contracts to hedge purchase commitments
denominated in foreign currencies. The term of these currency derivatives does
not exceed one year and the purpose is to protect the Company from the risk that
the eventual dollars being transferred will be adversely affected by changes in
exchange rates.

The Company has forward foreign currency exchange contracts to purchase 2.4
billion Japanese yen for $20 million through September, 1999. These contracts
are used to hedge the commitments to purchase engines from the Company's
Japanese joint venture and accordingly any gain or loss has been deferred at the
end of the 1999 fiscal year. There are no significant gains or losses included
in the above amounts.

The Company's foreign subsidiaries have the following forward currency contracts
outstanding at the end of fiscal 1999:

<TABLE>
<CAPTION>
In Millions
-------------
Local U.S. Latest
Currency Currency Dollars Expiration Date
- -------- -------- ------- ---------------
<S> <C> <C> <C>
Australian Dollars......... 10.0 6.4 June, 2000
Canadian Dollars........... 2.0 1.3 January, 2000
</TABLE>

There are no significant gains or losses included in the above amounts.

22
<PAGE> 25

NOTES ...
- --------------------------------------------------------------------------------

(11) EMPLOYEE BENEFIT COSTS:

Retirement Plan and Postretirement Benefits
The Company has noncontributory, defined benefit retirement plans and
postretirement benefit plans covering most Wisconsin employees. Effective the
last quarter of fiscal 1999, the Company adopted FAS 132 "Disclosures about
Pensions and Other Postretirement Benefits". The following provides a
reconcilation of obligations, plan assets and funded status of the plans for the
two years indicated, (dollars in thousands):

<TABLE>
<CAPTION>
Pension Benefits Other Postretirement Benefits
----------------------------- ---------------------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Actuarial Assumptions:
- ----------------------
Discounted Rate Used to Determine Present
Value of Projected Benefit Obligation............... 7.0% 7.0% 7.0% 7.0%

Expected Rate of Future Compensation
Level Increases..................................... 5.0% 5.0% n/a n/a

Expected Long-Term Rate of Return on
Plan Assets......................................... 9.0% 9.0% n/a n/a

Change in Benefit Obligations:
- ------------------------------
Actuarial Present Value of Benefit Obligations
at Beginning of Year................................ $ 649,083 $ 610,485 $ 96,580 $ 91,202
Service Cost......................................... 10,073 9,491 1,437 1,206
Interest Cost........................................ 44,911 44,531 6,466 6,773
Actuarial (Gain) Loss................................ 27,865 24,830 15,924 8,390
Benefits Paid........................................ (42,535) (40,254) (10,922) (10,991)
--------- --------- --------- ---------
Actuarial Present Value of Benefit Obligation
at End of Year...................................... $ 689,397 $ 649,083 $ 109,485 $ 96,580
--------- --------- --------- ---------

Change in Plan Assets:
- ----------------------
Plan Assets at Fair Value at Beginning of Year....... $ 845,955 $ 767,235 $ - $ -
Actual Return on Plan Assets......................... 82,474 118,445 - -
Employer Contributions............................... 528 529 10,922 10,991
Benefits Paid........................................ (42,535) (40,254) (10,922) (10,991)
--------- --------- --------- ---------
Plan Assets at Fair Value at End of Year............. $ 886,422 $ 845,955 $ - $ -
--------- --------- --------- ---------

Plan Assets in Excess of (Less Than) Projected
Benefit Obligation.................................. $ 197,025 $ 196,872 $(109,485) $ (96,580)
Remaining Unrecognized Net Obligation (Asset)........ (15,301) (20,739) 414 460
Unrecognized Net Loss(Gain).......................... (201,227) (202,625) 24,989 8,587
Unrecognized Prior Service Cost...................... 1,475 (513) 165 756
--------- --------- --------- ---------
Net Amount Recognized at End of Year................. $ (18,028) $ (27,005) $ (83,917) $ (86,777)
========= ========= ========= =========

Amounts Recognized on the Balance Sheets:
- -----------------------------------------
Accrued Pension...................................... $ (17,306) $ (26,477) $ - $ -
Accrued Salaries..................................... (722) (528) - -
Accrued Post Retirement Health Care.................. - - (67,877) (70,933)
Other Accruals....................................... - - (4,800) (4,800)
Accrued Employee Benefits............................ - - (11,240) (11,044)
--------- --------- --------- ---------
Net Amount Recognized at End of Year................. $ (18,028) $ (27,005) $ (83,917) $ (86,777)
========= ========= ========= =========
</TABLE>

23
<PAGE> 26
NOTES ...
- --------------------------------------------------------------------------------

The following table summarizes the plans' income and expense for the three years
indicated (dollars in thousands):

<TABLE>
<CAPTION>
Pension Benefits Other Postretirement Benefits
--------------------------------- ---------------------------------
1999 1998 1997 1999 1998 1997
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Components of Net Periodic Benefit Cost:
Service Cost-Benefits Earned During the Year. . . . . . . . $ 10,073 $ 9,491 $ 11,687 $ 1,437 $ 1,206 $ 1,359
Interest Cost on Projected Benefit Obligation . . . . . . . 44,911 44,531 41,850 6,466 6,773 6,190
Expected Return on Plan Assets. . . . . . . . . . . . . . . (58,252) (53,881) (50,230) - - -
Amortization of:
Transition Obligation (Asset) . . . . . . . . . . . . . . (5,306) (5,236) (5,118) 47 47 47
Prior Service Cost. . . . . . . . . . . . . . . . . . . . (106) (106) (160) 71 71 71
Actuarial (Gain) Loss . . . . . . . . . . . . . . . . . . 291 273 114 41 - -
-------- -------- -------- -------- -------- --------
Net Periodic Benefit Expense (Income) . . . . . . . . . . . $ (8,389) $ (4,928) $ (1,857) $ 8,062 $ 8,097 $ 7,667
======== ======== ======== ======== ======== ========
</TABLE>

The Company's supplemental pension plan has benefit obligations in excess of
plan assets. The benefit obligation, accumulated benefit obligation and fair
value of plan assets were $16,555,000, $13,975,000 and $0, respectively for the
1999 fiscal year, and $15,392,000, $12,763,000 and $0, respectively for the 1998
fiscal year. The postretirement benefit plans are unfunded.

The Company offered an early retirement window to certain of its Milwaukee union
members during the 1997 fiscal year. As a result, $33,457,000 was added to
pension expense and $3,644,000 was added to postretirement health care expense
in the fourth quarter of the 1997 fiscal year.

For the other postretirement benefit plans, the assumed early retirement rates
were adjusted for participants with over 30 years of service in fiscal 1999. In
addition, the postretirement medical coverage was limited to 10 years for
coverage prior to age 65.

For measurement purposes a 9% annual rate of increase in the per capita cost of
covered health care claims was assumed for the years 1999 through 2000,
decreasing gradually to 6% for the 2007. The health care cost trend rate
assumption has a significant effect on the amounts reported. An increase of one
percentage point, would increase the accumulated postretirement benefit by
$6,803,000, and would increase the service and interest cost by $836,000 for the
year. A corresponding decrease of one percentage point, would decrease the
accumulated postretirement benefit by $6,403,000 and decrease the service and
interest cost by $788,000 for the year.

Defined Contribution Plans
The Company has a defined contribution retirement plan that includes most U.S.
non-Wisconsin employees. Under the plan the Company makes a contribution on
behalf of covered employees equal to 2% of each participant's gross income, as
defined. For the fiscal years 1999, 1998 and 1997, the cost to the Company was
$1,919,000, $1,641,000 and $1,352,000, respectively.

Most U.S. employees of the Company may participate in a salary reduction
deferred compensation retirement plan. The Company makes matching contributions
of $.50 for every $1.00 deferred by a participant to a maximum of 1-1/2% or 3%
of each participant's salary, depending upon the participant's group. Company
contributions totaled $4,213,000 in 1999, $3,918,000 in 1998 and $3,944,000 in
1997.

Postemployment Benefits
The balance in this reserve at the end of fiscal 1999 was $1,946,000 and at the
end of fiscal 1998 was $1,527,000. Both were included in the caption Accrued
Employee Benefits in the accompanying balance sheets.

The Company also accrues the expected cost of postemployment benefits over the
years that the employees render service. These benefits are substantially
smaller amounts because they apply only to employees who permanently terminate
employment prior to retirement. The items included in this amount are disability
payments, life insurance and medical benefits, and these amounts are also
discounted using a 7.0% interest rate.

24
<PAGE> 27
NOTES ...
- --------------------------------------------------------------------------------

(12) DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS:

The following methods and assumptions were used to estimate the fair value of
each class of financial instruments for which it is practicable to estimate that
value:

Cash and Cash Equivalents, Domestic Notes Payable and Foreign Loans: The
carrying amount approximates fair value because of the short maturity of those
instruments.

Long-Term Debt: The fair value of the Company's long-term debt is estimated
based on quotations made on similar issues.

The estimated fair values of the Company's financial instruments are as follows
(in thousands of dollars):

1999
-------------------------
Carrying Fair
Amount Value
-------- -----
<S> <C> <C>
Cash and cash equivalents............. $ 60,806 $ 60,806
Domestic notes payable................ $ 4,335 $ 4,335
Foreign loans......................... $ 13,824 $ 13,824
Long-term debt--
9.21% Senior Notes due 2001,
including current maturities...... $ 30,000 $ 30,678
7.25% Notes due 2007................ $ 98,307 $ 97,545

<CAPTION>
1998
-------------------------
Carrying Fair
Amount Value
-------- -----
<S> <C> <C>
Cash and cash equivalents............. $ 84,527 $ 84,527
Domestic notes payable................ $ 4,700 $ 4,700
Foreign loans......................... $ 14,336 $ 14,336
Long-term debt--
9.21% Senior Notes due 2001,
including current maturities...... $ 45,000 $ 47,012
7.25% Notes due 2007................ $ 98,102 $105,071

</TABLE>

(13) SALE OF SOFTWARE BUSINESS:
In September 1998, the Company completed the sale of its POWERCOM software
business. The proceeds on the sale were in the form of marketable securities,
and are shown as such on the balance sheet. This sale did not result in any
material gains or losses, but did result in the loss of $2 million of gross
profit and the elimination of $12 million in selling expenses in fiscal 1999.

(14) SUBSEQUENT EVENT - DISPOSITION OF FOUNDRY ASSETS:
Effective August 23, 1999, the Company contributed certain assets related to its
foundry operations to a third party. In exchange for this contribution, the
Company received $23.6 million of cash and preferred stock with a face value of
$45 million. The provisions of the preferred stock include a 15% cumulative
dividend and is convertible into at least 31% of the common stock of the third
party. The disposition will result in a gain.

25
<PAGE> 28

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders of
Briggs & Stratton Corporation:

We have audited the accompanying consolidated balance sheets of Briggs &
Stratton Corporation (a Wisconsin Corporation) and subsidiaries as of June 27,
1999 and June 28, 1998, and the related consolidated statements of income,
shareholders' investment and cash flows for each of the three years in the
period ended June 27, 1999. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Briggs & Stratton Corporation
and subsidiaries as of June 27, 1999 and June 28, 1998, and the results of their
operations and their cash flows for each of the three years in the period ended
June 27, 1999, in conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

Milwaukee, Wisconsin,
July 29, 1999, (except with respect to Note 14, as to
which the date is August 23, 1999.)

26
<PAGE> 29
QUARTERLY FINANCIAL DATA, DIVIDEND AND MARKET INFORMATION (UNAUDITED)
- --------------------------------------------------------------------------------

In Thousands Per Share of Common Stock
------------------------ --------------------------------------
Market Price Range
on New York
Net Net Stock Exchange
Quarter Net Gross Income Income Dividends --------------
Ended Sales Profit (Loss) (Loss) Declared High Low
- ------- ----- ------ ------ ------ --------- ---- ---

FISCAL 1999
- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
SEPTEMBER $ 223,981 $ 37,612 $ 4,441 $ .19 $ .29 43-1/2 33-11/16

DECEMBER 359,943 71,471 24,637 1.05 .29 52-7/16 38-7/16

MARCH 476,259 102,831 41,813 1.79 .29 56-3/8 46-11/16

JUNE 441,543 93,441 35,210 1.51 .29 70-15/16 49-1/4
---------- -------- -------- ----- ------
TOTAL $1,501,726 $305,355 $106,101 $4.52* $ 1.16
========== ======== ======== ===== ======

Fiscal 1998
- -----------
September $ 170,557 $ 26,411 $ (2,632) $(.10) $ .28 51-3/8 47-1/8

December 308,481 50,897 10,294 .41 .28 53-3/8 47-1/4

March 469,055 94,773 35,778 1.45 .28 49 43-1/8

June 379,517 82,593 27,205 1.13 .28 46-1/4 36-7/8
---------- -------- -------- ----- ------
Total $1,327,610 $254,674 $ 70,645 $2.85* $ 1.12
========== ======== ======== ===== ======
</TABLE>

The number of record holders of Briggs & Stratton Corporation Common Stock on
August 12, 1999 was 4,598.

Net Income (Loss) per share of Common Stock represents Diluted Earnings per
Share.

* See Footnote No. 2 "Summary of Accounting Policies-Earnings per Share" to the
Consolidated Financial Statements. Amounts do not total because of differing
numbers of shares outstanding at the end of each quarter.

27
<PAGE> 30
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

The Company has not changed independent accountants in the last two years.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information in the Corporation's definitive Proxy Statement, prepared for
the 1999 Annual Meeting of Shareholders, concerning directors of the Corporation
under the caption "Election of Directors", is incorporated herein by reference.
The information concerning "Executive Officers of the Registrant" as a separate
item, appears in Part I of this Form 10-K. There is no information required by
Item 405 of Regulation S-K to be reported.

ITEM 11. EXECUTIVE COMPENSATION

The information in the Corporation's definitive Proxy Statement, prepared for
the 1999 Annual Meeting of Shareholders, concerning this item, in paragraphs two
and three under the caption "Election of Directors", in the final two paragraphs
of the "Nominating, Compensation and Governance Committee Report on Executive
Compensation" and the "Executive Compensation" section, is incorporated herein
by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information in the Corporation's definitive Proxy Statement, prepared for
the 1999 Annual Meeting of Shareholders, concerning this item, under captions
"Security Ownership of Certain Beneficial Owners" and "Security Ownership of
Management", is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Company has no relationships or related transactions to report pursuant to
Item 13.
PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) 1. Financial Statements
The following financial statements are included under the caption
"Financial Statements and Supplementary Data" in Part II, Item 8 hereof
and are incorporated herein by reference:

Consolidated Balance Sheets, June 27, 1999 and June 28, 1998
For the Years Ended June 27, 1999, June 28, 1998 and June 29, 1997:

Consolidated Statements of Earnings and Shareholders' Investment
Consolidated Statements of Cash Flow
Notes to Consolidated Financial Statements

Report of Independent Public Accountants

2. Financial Statement Schedules
All financial statement schedules for which provision is made in the
applicable accounting regulations of the Securities and Exchange
Commission are not required under the related instructions.

3. Exhibits
See Exhibit Index following the Signature Page, which is incorporated
herein by reference. Each management contract or compensatory plan or
arrangement required to be filed as an exhibit to this report is
identified in the Exhibit Index by an asterisk following the Exhibit
Number.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the last quarter of the period
covered by this report.

28
<PAGE> 31

SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

BRIGGS & STRATTON CORPORATION
By /s/ James E. Brenn
------------------------------------
James E. Brenn
September 3 , 1999 Senior Vice President and
- --------------------------- Chief Financial Officer

--------------------------------------------------------
POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Frederick P. Stratton, Jr. and John S. Shiely, and each
of them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments to this report, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their substitutes, may lawfully
do or cause to be done by virtue thereof.

--------------------------------------------------------

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the date indicated.*

<TABLE>

<S> <C>
/s/ F.P. Stratton, Jr. /s/ Peter A. Georgescu
- ----------------------------------------- -----------------------------------------
F. P. Stratton, Jr. Peter A. Georgescu
Chairman and Chief Executive Officer and Director
Director (Principal Executive Officer)

/s/ James E. Brenn /s/ Robert J. O'Toole
- ----------------------------------------- -----------------------------------------
James E. Brenn Robert J. O'Toole
Senior Vice President and Chief Financial Director
Officer (Principal Financial Officer)

/s/ Todd J. Teske /s/ C.B. Rogers, Jr.
- ----------------------------------------- -----------------------------------------
Todd J. Teske C. B. Rogers, Jr.
Controller (Principal Accounting Officer) Director

/s/ John S. Shiely
/s/ Michael E. Batten -----------------------------------------
- ----------------------------------------- John S. Shiely
Michael E. Batten President and Chief Operating Officer and
Director Director

/s/ Robert H. Eldridge /s/ Charles I. Story
- ----------------------------------------- -----------------------------------------
Robert H. Eldridge Charles I. Story
Executive Vice President and Director
Secretary-Treasurer and Director
*Each signature affixed as of
/s/ E. Margie Filter September 3 , 1999.
- ----------------------------------------- ------------------------
E. Margie Filter
Director

</TABLE>

29
<PAGE> 32

BRIGGS & STRATTON CORPORATION
(Commission File No. 1-1370)

EXHIBIT INDEX
1999 ANNUAL REPORT ON FORM 10-K

<TABLE>
<CAPTION>
Exhibit
Number Document Description
- ------ --------------------
<S> <C>
3.1 Articles of Incorporation.
(Filed as Exhibit 3.2 to the Company's Report on Form 10-Q for the
quarter ended October 2, 1994, and incorporated by reference herein.)

3.2 Bylaws.
(Filed as Exhibit 3.2 to the Company's Registration Statement on Form
8-B dated October 12, 1992 and incorporated by reference herein.)

4.0 Rights Agreement dated as of August 7, 1996, between Briggs & Stratton
Corporation and Firstar Trust Company which includes the form of Right
Certificate as Exhibit A and the Summary of Rights to Purchase Common
Shares as Exhibit B.
(Filed as Exhibit 4.1 to the Company's Registration Statement on Form
8-A, dated as of August 7, 1996 and incorporated by reference
herein.)

4.1 Indenture dated as of June 4, 1997 between Briggs & Stratton Corporation
and Bank One, N.A., as Trustee.
(Filed as Exhibit 4.1 to the Company's Report on Form 8-K dated May
30, 1997 and incorporated by reference herein.)

4.2 Form of 7-1/4% Note due September 15, 2007 of Briggs & Stratton
Corporation issued pursuant to the Indenture dated as of June 4, 1997
between Briggs & Stratton Corporation and Bank One, N.A., as Trustee.
(Filed as Exhibit 4.2 to the Company's Report on Form 8-K dated May
30, 1997 and incorporated by reference herein.)

4.3 Resolutions of the Board of Directors of Briggs & Stratton Corporation
authorizing the public offering of debt securities of Briggs & Stratton
Corporation in an aggregate principal amount of up to $175,000,000.
(Filed as Exhibit 4.3 to the Company's Report on Form 8-K dated May
30, 1997 and incorporated by reference herein.)

4.4 Actions of the Authorized Officers of Briggs & Stratton Corporation
authorizing the issuance of $100,000,000 aggregate principal amount of
7-1/4% Notes due September 15, 2007.
(Filed as Exhibit 4.4 to the Company's Report on Form 8-K dated May
30, 1997 and incorporated by reference herein.)

4.5 Officers' Certificate and Company Order of Briggs & Stratton Corporation
executed in conjunction with the issuance of $100,000,000 aggregate
principal amount of 7-1/4% Notes due September 15, 2007.
(Filed as Exhibit 4.5 to the Company's Report on Form 8-K dated May
30, 1997 and incorporated by reference herein.)

10.0* Forms of Officer Employment Agreements.
(Filed as Exhibit 10.0 to the Company's Report on Form 10-Q for the
quarter ended March 29, 1998 and incorporated by reference herein.)

10.1* Survivor Annuity Plan.
(Filed as Exhibit 10.1 to the Company's Annual Report on Form 10-K
for fiscal year ended June 30, 1986 and incorporated by reference
herein.)

10.2* Supplemental Retirement Program.
(Filed as Exhibit 10.3 to the Company's Annual Report on Form 10-K
for fiscal year ended June 30, 1990 and incorporated by reference
herein.)
</TABLE>

30
<PAGE> 33

<TABLE>
<CAPTION>
Exhibit
Number Document Description
- ------ --------------------
<S> <C>
10.3* Economic Value Added Incentive Compensation Plan, as amended and
restated.
(Filed herewith.)

10.4* Form of Change of Control Employment Agreements.
(Filed as Exhibit 10.4 to the Company's Annual Report on Form 10-K
for fiscal year ended June 27, 1993 and incorporated by reference
herein.)

10.5(a)* Trust Agreement with an independent trustee to provide payments under
various compensation agreements with company employees upon the
occurrence of a change in control.
(Filed as Exhibit 10.5 (a) to the Company's Annual Report on Form
10-K for fiscal year ended July 2, 1995 and incorporated by
reference herein.)

10.5(b)* Amendment to Trust Agreement with an independent trustee to provide
payments under various compensation agreements with company employees.
(Filed as Exhibit 10.5 (b) to the Company's Annual Report on Form
10-K for fiscal year ended July 2, 1995 and incorporated by
reference herein.)

10.6(a)* Stock Incentive Plan.
(Filed as Exhibit A to the Company's 1993 Annual Meeting Proxy
Statement, which was filed as Exhibit 100A to the Company's Annual
Report on Form 10-K for fiscal year ended June 27, 1993 and
incorporated by reference herein.)

10.6(b)* Amended and Restated Stock Incentive Plan.
(Filed as Exhibit A to the Company's 1999 Annual Meeting Proxy
Statement and incorporated by reference herein.)

10.7(a)* Leveraged Stock Option Program.
(Filed as Exhibit 10.7 to the Company's Annual Report on Form 10-K
for fiscal year ended June 27, 1993 and incorporated by reference
herein.)

10.7(b)* Amendment to Leveraged Stock Option Program.
(Filed as Exhibit 10.7 (b) to the Company's Annual Report on Form
10-K for fiscal year ended July 2, 1995 and incorporated by
reference herein.)

10.7(c)* Amended and Restated Leveraged Stock Option Program.
(Filed herewith.)

10.8* Amended and Restated Deferred Compensation Agreement for Fiscal 1995.
(Filed as Exhibit 10.9 to the Company's Annual Report on Form 10-K
for fiscal year ended July 2, 1995 and incorporated by reference
herein.)

10.9* Deferred Compensation Agreement for Fiscal 1997.
(Filed as Exhibit 10.10 to the Company's Annual Report on Form 10-K
for fiscal year ended June 30, 1996 and incorporated by reference
herein.)

10.10* Deferred Compensation Agreement for Fiscal 1998.
(Filed as Exhibit 10.11 to the Company's Annual Report on Form 10-K
for fiscal year ended June 29, 1997 and incorporated by reference
herein.)

10.11* Deferred Compensation Agreement for Fiscal 1999.
(Filed as Exhibit 10.11 to the Company's Annual Report on Form 10-K
for fiscal year ended June 28, 1998 and incorporated by reference
herein.)

10.12* Deferred Compensation Agreement for Fiscal 2000.
(Filed herewith.)

10.13* Deferred Compensation Plan for Directors.
(Filed as Exhibit 10.12 to the Company's Report on Form 10-Q for
the quarter ended December 31, 1995 and incorporated by reference
herein.)
</TABLE>

31
<PAGE> 34

<TABLE>
<CAPTION>
Exhibit
Number Document Description
- ------ --------------------
<S> <C>
10.14(a)* Director's Leveraged Stock Option Plan.
(Filed as Exhibit 10.14 to the Company's Annual Report on Form 10-K
for fiscal year ended June 29, 1997 and incorporated by reference
herein.)

10.14(b)* Amendment to Director's Leveraged Stock Option Plan.
(Filed herewith.)

10.15* Officer Separation Agreement.
(Filed as Exhibit 10.1 to the Company's Report on Form 10-Q for the
quarter ended December 27, 1998 and incorporated by reference
herein.)

10.16* Agreement with Executive Officer.
(Filed as Exhibit 10.2 to the Company's Report on Form 10-Q for the
quarter ended December 27, 1998 and incorporated by reference
herein.)

10.17* Executive Life Insurance Plan.
(Filed herewith.)

10.18* Key Employees Savings and Investment Plan.
(Filed herewith.)

10.19* Consultant Reimbursement Arrangement.
(Filed herewith.)

11 Computation of Earnings Per Share of Common Stock.
(Filed herewith.)

12 Computation of Ratio of Earnings to Fixed Charges.
(Filed herewith.)

21 Subsidiaries of the Registrant.
(Filed herewith.)

23 Consent of Independent Public Accountants.
(Filed herewith.)

24 Power of Attorney.
(Included in the Signatures Page of this report.)
</TABLE>

- --------------------------------------------------------------------------------
* Management contracts and executive compensation plans and arrangements
required to be filed as exhibits pursuant to Item 14 (c) of Form 10-K.

<PAGE> 1

BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

1999 Annual Report on Form 10-K

EXHIBIT NO. 10.3

BRIGGS & STRATTON CORPORATION
ECONOMIC VALUE ADDED
INCENTIVE COMPENSATION PLAN

As Amended and Restated
Effective July 1, 1999

As adopted by the Board of Directors on November 12, 1990,
and amended and restated by resolution of the Board of Directors
effective as of April 18, 1995, further amended by resolutions
effective October 17, 1995 and April 16, 1997 and further amended
and restated by resolution of the Board of Directors on April 21, 1999

<PAGE> 2

BRIGGS & STRATTON CORPORATION
ECONOMIC VALUE ADDED INCENTIVE COMPENSATION PLAN

As adopted by the Board of Directors on November 12, 1990,
and amended and restated by resolution of the Board of Directors
effective as of April 18, 1995, further amended by resolutions
effective October 17, 1995 and April 16, 1997 and further amended
and restated by the Board of Directors on April 21, 1999, effective July 1, 1999
- --------------------------------------------------------------------------------
I. Plan Objectives

A. To promote the maximization of shareholder value over the long
term by providing incentive compensation to key employees of
Briggs & Stratton Corporation (the "Company") in a form which is
designed to financially reward participants for an increase in
the value of the Company to its shareholders.

B. To provide competitive levels of compensation to enable the
Company to attract and retain employees who are able to exert a
significant impact on the value of the Company to its
shareholders.

C. To encourage teamwork and cooperation in the achievement of
Company goals.

D. To recognize differences in the performance of individual
participants.

II. Plan Administration

The Nominating, Compensation and Governance Committee of the Board of
Directors (the "Committee") shall be responsible for the design,
administration, and interpretation of the Plan.

III. Definitions

A. "Accrued Bonus" means the bonus, which may be negative or
positive, which is calculated in the manner set forth in Section
V.A.

B. "Actual EVA" means the EVA as calculated for the relevant Plan
Year.

C. "Base Salary" means the amount of a Participant's base
compensation earned during the Plan Year without adjustment for
bonuses, salary deferrals, value of benefits, imputed income,
special payments, amounts contributed to a savings plan or
similar items.

D. "Capital" means the Company's weighted average monthly operating
capital for the Plan Year, calculated as follows:

Current Assets
- Non-operating Investments
+ Bad Debt Reserve
+ LIFO Reserve
- Future Income Tax Benefits
- Current Noninterest-Bearing Liabilities
+ Warranty Reserve
+ Environmental Reserve
+ Property, Plant, Equipment, Net
- Construction in Progress
+ Other Assets (not including prepaid Pension Costs)
(+/-) Unusual Capital Items

2
<PAGE> 3

E. "Capital Charge" means the deemed opportunity cost of employing
Capital in the Company's businesses, determined as follows:

Capital Charge = Capital X Cost of Capital

F. "Cost of Capital" means the weighted average of the cost of
equity and the after tax cost of debt for the relevant Plan Year
on a market value basis. The Cost of Capital will be determined
(to the nearest tenth of a percent) by the Committee prior to
each Plan Year, consistent with the following methodology:

a) Cost of Equity = Risk Free Rate + (Business Risk Index X
Average Equity Risk Premium)

b) Debt Cost of Capital = Debt Yield X (1 - Tax Rate)

c) The weighted average of the Cost of Equity and the Debt
Cost of Capital is determined by reference to the actual
debt-to-capital ratio

where the Risk Free Rate is the average daily closing yield rate
on 30 year U.S. Treasury Bonds for the month of March immediately
preceding the relevant Plan Year, the Business Risk Index is
determined by using an average of the Beta available in the four
(4) most recent Value Line reports on the Company. The Average
Equity Risk Premium is 6%, the Debt Yield is the weighted average
yield of all borrowing included in the Company's permanent
capital, and the tax rate is the combination of the relevant
federal and state income tax rates.

G. "Designated Key Contributor" means those Participants named by
the Chief Executive Office as a Designated Key Contributor under
the Plan.

H. "Divisional EVA Performance Factor" means an Individual
Performance Factor calculated in the same manner as the Company
Performance Factor as set forth in Section VI.A., except that
EVA, Actual EVA, Target EVA, EVA Leverage Factor, NOPAT, Capital,
Capital Charge, Cost of Capital and other relevant terms shall be
defined by reference to the particular division, not by reference
to the entire Company.

I. "Economic Value Added" or "EVA" means the NOPAT that remains
after subtracting Capital Charge, expressed as follows:
NOPAT
Less: Capital Charge
--------------
Equals: EVA

EVA may be positive or negative.

J. "EVA Leverage Factor" means the expected deviation in EVA from
the average EVA, generally reflected as a percentage of capital
employed. For purposes of this Plan, the Company's EVA Leverage
Factor is determined to be $34 million.

K. "NOPAT" means cash adjusted net operating profits after taxes for
the Plan Year, calculated as follows:

Net Sales
- Cost of Goods Sold
(+/-) Change in LIFO Reserve
- Engineering/Selling & Administration
- Normal Pension Costs
(+/-) Change in Bad Debt Reserve
(+/-) Change in the Prepaid Pension Asset or Liability
(+/-) Change in Warranty Reserve
(+/-) Change in Environmental Reserve
(+/-) Other Income & Expense on Non-Operating Investments
(+/-) Other Unusual Income or Expense Items
(+/-) Amortization of Unusual Income or Expense Items
- Cash Taxes on the Above (+/- change in deferred tax
liability)

3
<PAGE> 4

L. "Plan Year" means the one year period coincident with the Company's
fiscal year.

M. "Senior Executives" means those Participants designated as Senior
Executives by the Committee with respect to any Plan Year.

N. "Target EVA" means the target level of EVA for the Plan Year,
determined as follows:

a) For Plan Year ending July 3, 1994 The Actual EVA for 1993 plus
Expected Improvement.

b) For subsequent Plan Years:

Prior Year Prior Year
Target EVA + Actual EVA
Current Plan = ---------------------------- + Expected
Year Target EVA 2 Improvement

For Plan Years through 1999, Expected Improvement will be $4 million,
except that it shall not be added to the current Plan Year Target EVA
to the extent it would make such Target EVA exceed $25 million. For
Plan Years after 1999, Expected Improvement will be $2 million, except
that it shall not be added to the current Plan Year Target EVA to the
extent it would make such Target EVA exceed $32 million.

IV. Eligibility

A. Eligible Positions. In general, all Company Officers, Division General
Managers, and members of the corporate operations group, and certain
direct reports of such individuals may be eligible for participation
in the Plan. However, actual participation will depend upon the
contribution and impact each eligible employee may have on the
Company's value to its shareholders, as determined by the Chairman and
CEO and President and COO of the Company, and approved by the
Committee.

B. Nomination and Approval. Each Plan year, the Chairman and CEO and the
President and COO of the Company will nominate eligible employees to
participate in the Plan for the next Plan Year. The Committee will
have the final authority to select Plan participants (the
"Participants") among the eligible employees nominated by the Chairman
and CEO and the President and COO of the Company. Continued
participation in the Plan is contingent on approval of the Committee.
Selection normally will take place, and will be communicated to each
Participant, prior to the beginning of the pertinent Plan Year.

V. Individual Participation Levels

A. Calculation of Accrued Bonus. Each Participant's Accrued Bonus will be
determined as a function of the Participant's Base Salary, the
Participant's Target Incentive Award (provided in paragraph V.B.,
below), Company Performance Factor (provided in Section VI.A.) and the
Individual Performance Factor (provided in Section VI.B.) for the Plan
Year. Each Participant's Accrued Bonus will be calculated as follows:
<TABLE>
<S> <C> <C> <C> <C> <C>
Target Company Target Individual
Participant's x Incentive x Performance Participant's x Incentive x Performance
Base Salary Award Factor + Base Salary Award Factor
-------------------------------------------------- -------------------------------------------------
2 2

</TABLE>

4
<PAGE> 5

B. Target Incentive Awards. The Target Incentive Awards will be
determined according to the following schedule:

<TABLE>
<CAPTION>
Target Incentive Award
Executive Position (% of Base Salary)
------------------ ------------------
<S> <C>
Chairman and CEO 100%
President and COO 75%
Executive Vice President
& Senior Vice President 60%
Other Elected Officers 40%
Division General Manager 40%
Designated Key Contributors 25%
All Others 20%
</TABLE>

VI. Performance Factors

A. Company Performance Factor Calculation. For any Plan Year, the Company
Performance Factor will be calculated as follows:

Company Performance Factor = 1.00 + Actual EVA - Target EVA
-------------------------
EVA Leverage Factor

B. Individual Performance Factor Calculation. Determination of the
Individual Performance Factor will be the responsibility of the
individual to whom the participant reports. This determination will be
subject to approval by the Committee and should be in conformance with
the process set forth below:

(1) Quantifiable Supporting Performance Factors. The Individual
Performance Factor of the Accrued Bonus calculation will be based
on the accomplishment of individual, financial and/or other goals
("Supporting Performance Factors"). Whenever possible, individual
performance will be evaluated according to quantifiable
benchmarks of success. These Supporting Performance Factors will
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 except in
the case of the quantifiable benchmark of Aggregate Gross Margin
where the achievement percentage continuum could be 50% to 200%
and be enumerated by a .5 to 2.0 continuum. Provided, however,
that if the quantifiable Supporting Performance Factor is based
on divisional EVA and is calculated in the same manner as the
Company Performance Factor as set forth in Section VI.A. with
respect to such division (such Supporting Performance Factor
referred to herein as a Divisional EVA Performance Factor), then
the Supporting Performance Factor may be unlimited, if so
approved by the Committee. A quantifiable Supporting Performance
Factor may also be unlimited if the quantifiable Supporting
Performance Factor as approved by the Committee for such
individual is the same as the Company Performance Factor
determined in accordance with Section VI.A.

(2) Non-Quantifiable Supporting Performance Factors. When performance
cannot be measured according to a quantifiable monitoring system,
an assessment of the Participant's overall performance may be
made based on a non-quantifiable Supporting Performance Factor
(or Factors). The person to whom the Participant reports will
evaluate the Participant's performance, and this evaluation will
determine the Participant's Supporting Performance Factor (or
Factors) according to the following schedule:
<TABLE>
<CAPTION>
Individual Supporting
Performance Rating Performance Factor
------------------ ------------------
<S> <C>
Outstanding 1.3 - 1.5
Excellent 1.1 - 1.3
Good .9 - 1.1
Satisfactory .5 - .9
Unsatisfactory 0
</TABLE>

5
<PAGE> 6

(3) Aggregate Individual Performance Factor. The Individual
Performance Factor to be used in the calculation of the Accrued
Bonus shall be equal to the sum of the quantifiable and/or
non-quantifiable Supporting Performance Factor(s), divided by the
number of Supporting Performance Factors. To illustrate, assume a
Participant with two Supporting Performance Factors:

Quantifiable Non-Quantifiable
Individual Supporting + Supporting
Performance Performance Performance
Factor = Factor A Factor B
----------------------------------
2

Notwithstanding the foregoing and subject to the approval of the
Committee, the individual to whom the Participant reports shall
have the authority to weight the Supporting Performance Factors,
according to relative importance. The weighting of each
Supporting Performance Factor shall be expressed as a percentage,
and the sum of the percentages applied to all of the Supporting
Performance Factors shall be 100%. The Individual Performance
Factor, if weighted factors are used, will then be equal to the
weighted average of such Supporting Performance Factors.

VII. Change in Status During the Plan Year

A. New Hire, Transfer, Promotion, Demotion

A newly hired employee or an employee transferred, promoted, or
demoted during the Plan Year to a position qualifying for
participation (or leaving the participating class) may accrue (subject
to discretion of the Committee) a pro rata Accrued Bonus based on the
percentage of the Plan Year (actual weeks/full year times a full year
award amount for that position) the employee is in each participating
position.

B. Discharge

An employee discharged during the Plan Year shall not be eligible for
an Accrued Bonus, even though his or her service arrangement or
contract extends past year-end, unless the Committee determines that
the conditions of the termination indicate that a prorated Accrued
Bonus is appropriate. The Committee shall have full and final
authority in making such a determination.

C. Resignation

An employee who resigns during the Plan Year to accept employment
elsewhere (including self-employment) will not be eligible for an
Accrued Bonus.

D. Death, Disability, Retirement

If a Participant's employment is terminated during a Plan Year by
reason of death, disability, or normal or early retirement under the
Company's retirement plan, a tentative Accrued Bonus will be
calculated as if the Participant had remained employed as of the end
of the Plan Year. The final Accrued Bonus will be calculated by
multiplying the tentative Accrued Bonus by a proration factor. The
proration factor will be equal to the number of full weeks of
employment during the Plan Year divided by fifty-two.

Each employee may name any beneficiary or beneficiaries (who may be
named contingently or successively) to whom any benefit under this
Plan is to be paid in case of the employee's death.

Each such designation shall revoke all prior designations by the
employee, shall be in the form prescribed by the Committee, and shall
be effective only when filed by the employee in writing with the
Committee during his or her lifetime.

6
<PAGE> 7

In the absence of any such designation, benefits remaining unpaid at
the employee's death shall be paid to the employee's estate.

E. Leave of Absence

An employee whose status as an active employee is changed during a
Plan Year as a result of a leave of absence may, at the discretion of
the Committee, be eligible for a pro rata Accrued Bonus determined in
the same way as in paragraph D. of this Section.

VIII. Bonus Paid and Bonus Bank

All or a portion of the Accrued Bonus will be either paid to the
Participant or credited to or charged against the Bonus Bank as
provided in this Article.

A. Participants Who Are Not Senior Executives. All positive Accrued
Bonuses of Participants who are not Senior Executives for the Plan
Year shall be paid in cash, less amounts required by law to be
withheld for income and employment tax purposes, on or before the end
of the second month following the end of the Plan Year in which the
Accrued Bonus was earned. Participants who are not Senior Executives
shall not be charged or otherwise assessed for negative Accrued
Bonuses nor shall such Participants have any portion of their Accrued
Bonuses banked.

B. Participants Who Are Senior Executives. The Total Bonus Payout to
Participants who are Senior Executives for the Plan Year shall be as
follows:

Accrued Bonus
Less: Extraordinary Bonus Accrual
Plus: Bank Payout
---------------
Equals: Total Bonus Payout

The Total Bonus Payout for each Plan Year, less amounts required by
law to be withheld for income tax and employment tax purposes, shall
be paid on or before the end of the second month following the end of
the Plan Year in which it was earned.

C. Establishment of a Bonus Bank. To encourage a long term commitment to
the enhancement of shareholder value by Senior Executives,
"Extraordinary Bonus Accruals" shall be credited to an "at risk"
deferred account ("Bonus Bank") for each such Participant, and all
negative Accrued Bonuses shall be charged against the Bonus Bank, as
determined in accordance with the following:

1. "Bonus Bank" means, with respect to each Senior Executive, a
bookkeeping record of an account to which Extraordinary Bonus
Accruals are credited, and negative Accrued Bonuses debited as
the case may be, for each Plan Year, and from which bonus
payments to such Senior Executive are debited.

2. "Bank Balance" means, with respect to each Senior Executive, a
bookkeeping record of the net balance of the amounts credited to
and debited against such Senior Executive's Bonus Bank. The Bank
Balance shall initially be equal to zero.

3. "Extraordinary Bonus Accrual" shall mean the amount of the
Accrued Bonus for any year that exceeds 1.25 times the portion of
the Senior Executive's Base Salary which is represented by the
Target Incentive Award in the event that the beginning Bank
Balance is positive or zero, and .75 times the portion of the
Senior Executive's Base Salary which is represented by the Target
Incentive Award in the event that the beginning Bank Balance is
negative.

4. Annual Allocation. Each Senior Executive's Extraordinary Bonus
Accrual or negative Accrued Bonus is credited or debited to the
Bonus Bank maintained for that Senior Executive. Such Annual
Allocation will occur as soon as possible after the conclusion of
each Plan Year. Although a Bonus Bank may, as a result of
negative Accrual Bonuses have a deficit, no Senior Executive
shall be required, at any time, to reimburse his/her Bonus Bank.

7
<PAGE> 8

5. "Available Balance" means that the Bank Balance at the point in
time immediately after the Annual Allocation has been made.

6. "Payout Percentage" means the percentage of the Available Balance
that may be paid out in cash to the Participant. The Payout
Percentage will equal 33%.

7. "Bank Payout" means the amount of the Available Balance that may
be paid out in cash to the Senior Executive for each Plan Year.
The Bank Payout is calculated as follows:

Bank Payout = Available Balance X Payout Percentage

The Bank Payout is subtracted from the Bank Balance.

8. Treatment of Available Balance Upon Termination

a) Resignation or Termination With Cause. Senior Executives
leaving voluntarily to accept employment elsewhere
(including self-employment) or who are terminated with
cause will forfeit their Available Balance.

b) Retirement, Death, Disability or Termination Without Cause.
In the event of a Senior Executive's normal or early
retirement under the Company's retirement plan, death,
disability, or termination without cause, the Available
Balance, less amounts required by law to be withheld for
income tax and employment tax purposes, shall be paid to
the Senior Executive on or before the end of the second
month following the end of the Plan Year in which the
termination for one of such events occurred.

c) For purposes of this Plan "cause" shall mean:

(i) any act or acts of the Participant constituting a
felony under the laws of the United States, any
state thereof or any foreign jurisdiction;

(ii) any material breach by the Participant of any
employment agreement with the Company or the
policies of the Company or the willful and
persistent (after written notice to the
Participant) failure or refusal of the Participant
to comply with any lawful directives of the Board;

(iii) a course of conduct amounting to gross neglect,
willful misconduct or dishonesty; or

(iv) any misappropriation of material property of the
Company by the Participant or any misappropriation
of a corporate or business opportunity of the
Company by the Participant.

IX. Administrative Provisions

A. Amendments. The Board of Directors of the Company shall have the right
to modify or amend this Plan from time to time, or suspend it or
terminate it entirely; provided that no such modification, amendment,
suspension, or termination may, without the consent of any affected
participants (or beneficiaries of such participants in the event of
death), reduce the rights of any such participants (or beneficiaries,
as applicable) to a payment or distribution already earned under Plan
terms in effect prior to such change.

B. Interpretation of Plan. Any decision of the Committee with respect to
any issues concerning individual selected for awards, the amount,
terms, form and time of payment of awards, and interpretation of any
Plan guideline, definition, or requirement shall be final and binding.

C. Effect of Award on Other Employee Benefits. By acceptance of a bonus
award, each recipient agrees that such award is special additional
compensation and that it will not affect any employee benefit, e.g.,
life insurance, etc., in which the recipient participates, except as
provided in paragraph D. below.

<PAGE> 9

D. Retirement Programs. Awards made under this Plan shall be included in
the employee's compensation for purposes of the Company Retirement
Plans and Savings Plan.

E. Right to Continued Employment; Additional Awards. The receipt of a
bonus award shall not give the recipient any right to continued
employment, and the right and power to dismiss any employee is
specifically reserved to the Company. In addition, the receipt of a
bonus award with respect to any Plan Year shall not entitle the
recipient to an award with respect to any subsequent Plan Year.

F. Adjustments to Performance Goals. When a performance goal is based on
Economic Value Added or other quantifiable financial or accounting
measure, it may be necessary to exclude significant nonbudgeted or
noncontrollable gains or losses from actual financial results in order
to properly measure performance. The Committee will decide those items
that shall be considered in adjusting actual results. For example,
some types of items that may be considered for exclusion are:

(1) Any gains or losses which will be treated as extraordinary in the
Company's financial statements.

(2) Profits or losses of any entities acquired by the Company during
the Plan Year, assuming they were not included in the budget
and/or the goal.

(3) Material gains or losses not in the budget and/or the goal which
are of a nonrecurring nature and are not considered to be in the
ordinary course of business. Some of these would be as follows:

(a) Gains or losses from the sale or disposal of real estate or
property.

(b) Gains resulting from insurance recoveries when such gains
relate to claims filed in prior years.

(c) Losses resulting from natural catastrophes, when the cause
of the catastrophe is beyond the control of the Company and
did not result from any failure or negligence on the
Company's part.

G. Vesting. All amounts due but unpaid to any Participant under this plan
shall vest, subject to the terms of this EVA Plan, upon actual
termination of employment of the Participant.

X. Miscellaneous

A. Indemnification. Each person who is or who shall have been a member of
the Committee or of the Board, or who is or shall have been an
employee of the Company, shall not be liable for, and shall be
indemnified and held harmless by the Company from any loss, cost,
liability, or expense that may be imposed upon or reasonably incurred
by him or her in connection with any claim, action, suit, or
proceeding to which he or she may be a party by reason of any action
taken or failure to act under this Plan. The foregoing right of
indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the
Company's Articles of Incorporation or Bylaws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or
hold them harmless.

B. Expenses of the Plan. The expenses of administering this Plan shall be
borne by the Company.

C. Withholding Taxes. The Company shall have the right to deduct from all
payments under this Plan any Federal or state taxes required by law to
be withheld with respect to such payments.

D. Governing Law. This Plan shall be construed in accordance with and
governed by the laws of the State of Wisconsin.

<PAGE> 1
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

1999 Annual Report on Form 10-K

EXHIBIT NO. 10.7(c)

BRIGGS & STRATTON CORPORATION
LEVERAGED STOCK OPTION PROGRAM

As adopted by the Nominating and Salaried Committee
of the Board of Directors on August 16, 1993 and
amended by resolutions effective
July 31, 1995 and July 1, 1999

<PAGE> 2

BRIGGS & STRATTON CORPORATION
LEVERAGED STOCK OPTION PROGRAM

1.0 Objectives.

The Leveraged Stock Option Program ("LSO Program") is designed to build upon the
Company's Economic Value Added Incentive Compensation Plan ("EVA Plan") by tying
the interests of all Senior Executives to the long term consolidated results of
the Company. In this way, the objectives of Senior Executives throughout the
Company will be more closely aligned with the Company's Shareholders. Whereas
the EVA Plan provides for near and intermediate term rewards, the LSO Program
provides a longer term focus by allowing Senior Executives to participate in the
long-term appreciation in the equity value of the Company. In general, the LSO
Program is structured such that each year an amount equivalent to the Total
Bonus Payout under the EVA Plan is invested on behalf of Senior Executives in
options on the Company's Stock ("LSOs"). These LSOs become exercisable after
they have been held for three years, and they expire at the end of seven years.
The LSO Program is also structured so that a fair return must be provided to the
Company's Shareholders before the options become valuable.

2.0 Leveraged Stock Option Grant.

For fiscal 1994 and subsequent years, the dollar amount to be invested in LSOs
for each Senior Executive shall be equal to the amount of each Participant's
Total Bonus Payout determined under the EVA Plan as amended effective for fiscal
year 1994. The number of LSOs awarded shall be determined by dividing (a) the
dollar amount of such LSO award by (b) 10% of the Fair Market Value of Company
stock on the date of the grant, as determined by the Committee, rounded (up or
down) to the nearest 10 shares. Fair Market Value is defined in the Company's
Stock Incentive Plan ("SIP Plan").

3.0 Term.

All LSOs shall be exercisable beginning on the third anniversary of the date of
grant. All LSOs granted for fiscal years through June 30, 1999 shall terminate
on the fifth anniversary of the date of grant unless sooner exercised, unless
the Committee determines other dates. All LSOs granted thereafter shall
terminate on the seventh anniversary of the date of grant unless sooner
exercised, unless the Committee determines other dates.

4.0 Exercise Price.

The exercise price for LSOs shall be the product of 90% of the Fair Market Value
per share as determined above, times the sum taken to the fifth (5th) power of
(a) 1, plus (b) the Estimated Annual Growth Rate, but in no event may the
exercise price be less than Fair Market Value on the date of grant.

<PAGE> 3

The Estimated Annual Growth Rate (intended to represent annual percentage stock
appreciation at least in the amount of the Company's cost of capital, with due
consideration for dividends paid, risk and illiquidity) is the average daily
closing 30 year U.S. Treasury bond yield rate for the month of March immediately
preceding the relevant Plan Year, plus 1%. So,

Exercise Price = (.9 x FMV) x (1 + Estimated Annual Growth Rate)(5)

Example: $75 share price; 7.85% Estimated Annual Growth Rate (6.85% 30 year
U.S. Treasury bond rate, plus 1%):
$67.50 (90% FMV x (1.0785)(5) = $98.49

5.0 Limitations on LSO Grants and Carryover.

Notwithstanding Section 2, the maximum number of LSOs that may be granted to all
Senior Executives for any Plan Year of this LSO Program, shall be 600,000, and
the maximum number of LSOs that may be granted cumulatively under this LSO
Program shall be 2,539,986. In the event that the 600,000 limitation shall be in
effect for any Plan Year, the dollar amount to be invested for each Senior
Executive shall be reduced by proration based on the aggregate Total Bonus
Payouts of all Senior Executives so that the limitation is not exceeded. 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.

6.0 The Stock Incentive Plan.

Except as modified herein, LSOs are Incentive Stock Options under the Company's
SIP Plan as amended from time to time to the extent they are eligible for
treatment as such under Section 422 of the Internal Revenue Code. If not
eligible for ISO Treatment, the LSOs shall constitute nonqualified stock
options. Except as specifically modified herein, LSOs shall be governed by the
terms of the Company's Stock Incentive Plan, and shall be granted as described
in this LSO Program annually unless the Committee modifies or terminates either
the EVA Plan or the SIP Plan. As provided in the SIP Plan, all grants of LSOs to
Participants who are subject to Section 16(b) of the Securities Exchange Act of
1934 are subject to approval of the Company Shareholders. In the event such
approval is not obtained, this Program shall terminate.

7.0 Definitions.

All capitalized terms used herein that are not otherwise defined shall have the
same meaning given to them in the Company's Economic Value Added Incentive
Compensation Plan.

<PAGE> 1

BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

1999 Annual Report on Form 10-K

EXHIBIT NO. 10.12

DEFERRED COMPENSATION AGREEMENT

AGREEMENT made this 18th day of June, 1999, between Briggs & Stratton
Corporation (the "Company") and Frederick P. Stratton, Jr. (the "Executive").

1. Deferral of Compensation. This Agreement shall operate to defer, on an
unfunded basis, compensation earned by the Executive as an employee of the
Company for the Company's fiscal year ending in 2000, to the extent that such
compensation would otherwise be non-deductible under Section 162(m) of the
Internal Revenue Code, as amended from time to time. The amount deferred
hereunder shall be paid to the Executive as soon as practicable following the
Company fiscal year in which the Executive terminates employment with the
Company, such payment to be made in one lump sum, or in such other manner as may
be agreed upon between the Executive and the Company's Nominating, Compensation
and Governance Committee of the Board. Such agreement, if any, must occur before
the termination of employment by the Executive, or such payment shall be in a
lump sum.

2. Death of Executive. If the Executive dies prior to receiving all funds
payable hereunder, the entire unpaid balance shall be paid in the same manner as
provided for the Executive under the Company's Economic Value Added Incentive
Compensation Plan.

<PAGE> 2

3. Binding Effect. This Agreement has been approved by the Company's
Board of Directors and its Nominating, Compensation and Governance Committee,
and shall be binding and inure to the benefit of the Company, its successors and
assigns and the Executive and his heirs, executors, administrators, and legal
representatives.

4. Earnings on Deferrals. On or before June 30, 2000, the Executive shall
elect to have any deferrals hereunder credited with earnings in accordance with
(a) or (b) below:

(a) Earnings on a book (unfunded) basis beginning on the date the
deferred amount would otherwise have been paid, and continuing
thereafter at a rate equal to 80% of the prime rate made
available to the best customers of Firstar Bank Milwaukee, N.A.,
and adjusted and compounded annually as of the last day of each
subsequent Company fiscal year until paid;

(b) Earnings at a rate designed to reflect the performance of Company
stock. Under this alternative, the amount deferred shall be
converted into shares of phantom Company stock as soon as
practicable following the determination of the amount deferred
under this Agreement. Each year, the Committee shall determine
the amount of dividends that would have been paid on the phantom
stock and convert such dividends into additional shares of
phantom stock. Following the conversions described above, the
Company shall promptly advise Executive of the number of phantom
shares acquired. If Executive chooses this investment
alternative, Executive may elect

<PAGE> 3

to receive distributions in cash or stock; provided that any
stock distributions shall be subject to any necessary approvals
under securities laws or exchange requirements.

5. Section 16 Consequences. Executive acknowledges that an election under
Section 4(b) above will have implications under Section 16 of the Securities
Exchange Act of 1934, including potential Section 16(b) liability if Executive
or an affiliate has a matching transaction. Executive acknowledges that he will
be responsible for reporting transactions under this Agreement on the applicable
Form 4 or Form 5.

6. Unfunded Status of Agreement. It is intended that this Agreement
constitute an "unfunded" arrangement for deferred compensation. The Committee
may authorize the creation of a trust or other arrangement to meet the
obligations created under this Agreement provided, however, that unless the
Committee otherwise determines, the existence of such trust or other arrangement
is consistent with the "unfunded" status of the Agreement.

7. Miscellaneous. Payment of deferrals hereunder shall be subject to tax
or other withholding requirements as may be required by law. The Company's
Board, or its Nominating, Compensation and Governance Committee, shall have the
power to modify or terminate this Agreement, but only with consent of the
Executive.

3
<PAGE> 4

IN WITNESS WHEREOF, Briggs & Stratton Corporation has caused this Deferred
Compensation Agreement to be executed by its duly authorized Director and
Frederick P. Stratton, Jr., together with his spouse, Anne Y. Stratton, hereunto
have set their hands as of the date first above written.

BRIGGS & STRATTON CORPORATION

By: /s/ C. B. Rogers, Jr.
-----------------------------------------
Clarence B. Rogers, Jr.
Chairman, Nominating, Compensation
and Governance Committee

/s/ F. P. Stratton, Jr.
-----------------------------------------
Frederick P. Stratton, Jr.

/s/ Anne Y. Stratton
-----------------------------------------
Anne Y. Stratton

<PAGE> 1
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

1999 Annual Report of Form 10-K

EXHIBIT NO. 10.14(b)

AMENDMENT TO DIRECTOR'S LEVERAGED STOCK OPTION PLAN

Adopted Effective July 1, 1999

NOW THEREFORE, BE IT RESOLVED, that the following amendments are hereby
adopted effective for LSOs granted for Fiscal 2000 Company performance:

(a) Section 1.0 Objectives is amended by deleting the second to last
Sentence and replacing it with the following:
"These LSOs become exercisable after they have been held for
three years, and they expire at the end of seven years."

(b) Section 6.0 Term is replaced in its entirety with the following:
"All LSOs shall be exercisable beginning on the third anniversary
of the date of grant, and shall terminate on the seventh
anniversary of the date of grant, unless sooner exercised or the
Board determines other dates of grant."

<PAGE> 1

BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

1999 Annual Report on Form 10-K

EXHIBIT NO. 10.17

BRIGGS & STRATTON CORPORATION
EXECUTIVE LIFE INSURANCE PLAN

Adopted effective July 1, 1999

Executive Officers and certain Key Employees are eligible to participate in the
Plan. The Plan provides each eligible Plan participant with an individual,
assignable life insurance benefit based on the following benefit formula for
his/her respective status as an Executive Officer or Key Employee of the
Company.

- Each Executive Officer will receive a life insurance benefit equal to
two (2) times his/her projected base salary (to a maximum of $500,000)
less $50,000, during the anticipated period of active employment.
Following the anticipated retirement date, each officer's projected
life insurance benefit will be reduced to $200,000.

- Each Key Employee will receive a life insurance benefit equal to two
(2) times his/her projected base salary (to a maximum of $500,000)
less $50,000, during the anticipated period of active employment.
Following the anticipated retirement date, each executive's projected
life insurance benefit will be reduced to $100,000.

Briggs & Stratton Corporation enters into a "collateral assignment split dollar"
insurance arrangement with each Plan participant to provide such individual with
the assignable life insurance benefits under the Plan.

<PAGE> 1
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

1999 Annual Report on Form 10-K

EXHIBIT NO. 10.18

BRIGGS & STRATTON CORPORATION
KEY EMPLOYEE SAVINGS AND INVESTMENT PLAN

Effective July 1, 1999

<PAGE> 2

TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page

<S> <C> <C>
ARTICLE I DEFINITIONS 1
1.1 Account 1
1.2 Beneficiary 1
1.3 Board 1
1.4 Committee 1
1.5 Effective Date 1
1.6 Employer 2
1.7 Participant 2
1.8 Plan 2
1.9 Plan Year 2
1.10 Regular Compensation 2
1.11 Total Bonus Payout 2
1.12 Valuation Date 2

ARTICLE II PARTICIPATION IN THE PLAN 3
2.1 Eligibility 3

ARTICLE III DEFERRAL CONTRIBUTIONS 4
3.1 Manner of Electing Deferral Contributions With
Respect to Regular Compensation 4
3.2 Manner of Electing Deferral Contributions With
Respect to Total Bonus Payout 4
3.3 Discontinuance of Offset 5
3.4 Crediting to Deferral Contributions Account 5

ARTICLE IV EMPLOYER MATCHING CONTRIBUTIONS 6
4.1 Amount 6
4.2 Crediting to Employer Matching Contribution
Account 6

ARTICLE V INTEREST 7
5.1 Crediting of Interest 7
5.2 Reports to Participants 7
5.3 Grantor Trust only 7

ARTICLE VI DISTRIBUTION 9
6.1 Distribution 9
6.2 Committee Discretion to Accelerate 9
6.3 Change in Law 10

</TABLE>

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<PAGE> 3

<TABLE>
<S> <C> <C>
ARTICLE VII ADMINISTRATION 11
7.1 In General 11
7.2 Committee Discretion 11
7.3 Committee Members' Conflict of Interest 12
7.4 Governing Law 12
7.5 Expenses 12
7.6 Minor or Incompetent Payees 12
7.7 Withholding 12
7.8 Indemnification 13

ARTICLE VIII BENEFITS UNFUNDED 14

ARTICLE IX NONALIENATION OF BENEFITS 15

ARTICLE X CLAIMS PROCEDURE 16
10.1 Claims 16
10.2 Review Procedure 16

ARTICLE XI AMENDMENT AND TERMINATION 17

ARTICLE XII MISCELLANOUS 18
12.1 No Right to Continued Employment 18
12.2 Impact on Other Plans 18
12.3 Severability 18
12.4 Gender and Number 18
12.5 Evidence Conclusive 18
12.6 Status of Plan Under ERISA 19
12.7 Name and Address Changes 19
</TABLE>

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<PAGE> 4

ARTICLE I

Definitions

1.1 "Account" means the records of the interests of a Participant in the
Plan.

(a) "Matching Contributions Account" means the record of a Participant's
interest in the Plan attributable to Employer Matching Contributions
described in Article IV.

(b) "Deferral Contributions Account" means the record of a Participant's
interest in the Plan attributable to his Deferral Contributions
described in Article III.

1.2 "Beneficiary" means the person designated by a Participant to receive
any payments due hereunder upon the death of the Participant. All Beneficiary
designations shall be made in writing in such form and manner as may from time
to time be prescribed by the Committee. The designation on file with the
Committee at the time of the Participant's death shall be controlling. In the
event the deceased Participant has not designated a Beneficiary, or should such
Participant have no designated Beneficiary surviving, his undistributed Account
balance shall be paid to:

(a) his surviving spouse, if any;

(b) if no surviving spouse, then his surviving children, including legally
adopted children, in equal shares; or

1.3 "Board" means the Board of Directors of the Employer.

1.4 "Committee" means the Nominating, Compensation and Governance Committee
of the Board.

1.5 "Effective Date" means the effective date of this Briggs & Stratton
Corporation Key Employee Savings and Investment Plan and shall be July 1, 1999.

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<PAGE> 5

1.6 "Employer" means Briggs & Stratton Corporation.

1.7 "Participant" shall mean an employee of the Employer designated as
eligible under Section 2.1 and any person who previously participated in the
Plan and is entitled to benefits hereunder.

1.8 "Plan" means the Briggs & Stratton Corporation Key Employee Savings
and Investment Plan as set forth in this document and all subsequent amendments
hereto.

1.9 "Plan Year" means the twelve-month period on which the records of the
Plan are maintained, currently the Employer's fiscal year, which is the period
beginning July 1 and ending June 30.

1.10 "Regular Compensation" means the total compensation payable to a
Participant by the Employer for any period (prior to elective deferrals under
any deferral agreement) which would be taken into account as Annual Pay, as
defined in Section 1.05 of the Briggs & Stratton Corporation Employee Savings
and Investment Plan; provided, however, that the maximum limit on Annual Pay in
that Section 1.05 shall be ignored and, also, the portion of Annual Pay
consisting of a Participant's bonus under the Briggs & Stratton Corporation
Economic Value Added Incentive Compensation Plan shall be excluded.

1.11 "Total Bonus Payout" means the amount of bonus that would be paid to a
Participant in cash in any Plan Year (prior to elective deferrals under any
deferral agreement) under the Briggs & Stratton Corporation Economic Value Added
Incentive Compensation Plan.

1.12 "Valuation Date" means the last day of each calendar month.

-2-

<PAGE> 6

ARTICLE II

Participation In The Plan

2.1 Eligibility.

Employees eligible to participate in the Plan are all Board elected
officers and such other key employees as are recommended by management and
approved by the Committee. Each person who is a Board elected officer on July 1,
1999 shall become a Participant as of that date. Each other person who becomes a
Board elected officer shall become a Participant in the Plan effective with the
beginning of the next calendar quarter following the date such person becomes a
Board elected officer. Such other key employees who are approved by the
Committee for participation shall become Participants on the date specified by
the Committee.

-3-

<PAGE> 7

ARTICLE III

Deferral Contributions

3.1 Manner of Electing Deferral Contributions With Respect To Regular
Compensation.

(a) A Participant in the Plan may (on a form provided by the Employer)
elect to defer a whole percentage amount (not exceeding 12%) of the
Participant's Regular Compensation earned during periods subsequent to such
election. For an individual who becomes a Participant on July 1, 1999, the
individual's initial deferral election shall be made by June 15, 1999 but shall
not become effective until July 1, 1999. Similarly, an individual who becomes a
Participant on a later date who desires that deferrals commence on the date he
becomes a Participant shall make an initial election at least 15 days before
actually becoming a Participant but the election shall not become effective
until the date the individual becomes a Participant. A Participant's deferral
election shall continue in effect for the remainder of the Plan Year in which it
becomes effective and for all subsequent Plan Years until prospectively modified
or revoked by filing a new election. Any such election (or modification or
revocation of an election) shall be filed by the 15th day of the month
preceding the beginning of any calendar quarter and shall be effective
prospectively effective with the first day of that calendar quarter so that the
election is made before the period of service for which compensation is earned.

(b) Notwithstanding any other provision of this Plan to the contrary, the
amount of a Participant's Regular Compensation which shall be deferred each
payroll period shall be reduced and offset by an amount so that (i) plus (ii)
equals the deferral which would have been made in the absence of the offset
where (i) equals the actual deferral after the offset and (ii) equals (A) 6%
times (B) the Participant's Regular Compensation minus the actual deferral made
after the offset.

3.2 Manner of Electing Deferral Contributions With Respect To Total Bonus
Payout.

(a) A Participant may elect to defer a whole percentage amount (not
exceeding 12%) of the Participant's Total Bonus Payout paid during any Plan Year
beginning after June 30, 2000. A Total Bonus Payout, if any, is made in August
of each year. An election to defer a Total Bonus Payout must be made no later
than March 15 preceding the date the Total Bonus Payout is made. The Participant
must file a separate Total Bonus Payout election with respect to each Plan Year
in which the Participant desires to defer a portion of the Total Bonus Payout.

(b) Notwithstanding any other provision of this Plan to the contrary, the
amount of a Participant's Total Bonus Payout which shall be deferred shall be
reduced and offset by an amount so that (i) plus (ii) equals the deferral which
would have been made in the absence of the offset where (i) equals the actual
deferral made after the offset and (ii) equals (A) 6%

-4-

<PAGE> 8

times (B) the Participant's Total Bonus Payment minus the actual deferral made
after the offset.

3.3 Discontinuance of Offset.

The offsets to a Participant's deferral under Sections 3.1(b) and 3.2(b)
shall be discontinued during a Plan Year after the total amount of the offsets
made under Sections 3.1(b) and 3.2(b) in the aggregate for the Plan Year equals
6% of the dollar limit described in Internal Revenue Code Section 401(a)(17)
(adjusted for cost of living increases). If the Section 401(a)(17) limit is
adjusted during the middle of a Plan Year, the offsets shall be resumed if
necessary so that the total amount of the offsets for the Plan Year equals 6% of
the dollar limit under Code Section 401(a)(17) as in effect at the end of the
Plan Year.

3.4 Crediting to Deferral Contributions Account.

Amounts equal to the amounts of compensation deferred under Section 3.1
and/or Section 3.2 will be credited to the Participant's Deferral Contributions
Account under the Plan as of the last day of the calendar quarter in which such
amounts would have been paid to the Participant but for the Participant's
deferral election.

-5-

<PAGE> 9

ARTICLE IV

Employer Matching Contributions

4.1 Amount.

For each pay period the Employer shall credit to each Participant's
Employer Matching Contribution Account an amount equal to 50% of the
Participant's Deferral Contributions under Sections 3.1 and 3.2 above;
provided, however, that the total Employer Matching Contributions for any
pay period shall be limited so that they do not exceed (i) 3% of the
Regular Compensation and Total Bonus Payout of the Participant for such pay
period minus (ii) an amount equal to (A) times (B) where (A) is 3% and (B)
is the Participant's Regular Compensation and Total Bonus Payout for such
pay period minus the amount of his Deferral Contributions under Article III
for such pay period. The offset under clause (ii) of the preceding sentence
shall cease to be applied in pay periods after the cumulative amount of the
Participant's Regular Compensation and Total Bonus Payout minus the amount
of his Deferral Contribution under Article III for the Plan Year equals the
dollar amount described in Internal Revenue Code Section 401(a)(17), as
adjusted for cost of living increases. If the dollar limitation under
Section 401(a)(17) is adjusted during the Plan Year, the offsets under
clause (ii) above shall be resumed if necessary so that the total amount of
the offsets under clause (ii) above equal 3% of the limitation under Code
Section 401(a)(17) as in effect at the end of the Plan Year or, if less, 3%
of the Participant's Regular Compensation and Total Bonus Payout for the
Plan Year minus the amount of his Deferral Contributions under Article III
for the Plan Year.

4.2 Crediting to Employer Matching Contribution Account.

Matching Contributions under Section 4.1 shall be credited to the
Participant's Matching Contribution Account under the Plan as of the last
day of the calendar quarter in which the Deferral Contributions which are
being matched would have been paid to the Participant but for the
Participant's deferral election.

-6-

<PAGE> 10

ARTICLE V

Interest

5.1 Crediting of Interest.

A Participant's Account shall be credited with interest each quarter at a
rate equal to 80% of the Prime Rate at the Firstar Bank, Milwaukee, N.A. on the
last day of the quarter divided by four (4). Interest for a quarter shall be
credited on the last day of the quarter and shall be calculated with respect to
the Participant's beginning Account balance for the quarter. A Participant's
Account shall be credited with interest until the date payment of the
Participant's Account is completed.

5.2 Reports to Participants.

The Employer shall provide annual reports to each Participant showing (a)
the value of the Account as of the most recent June 30 Valuation Date; (b) the
amount of contributions credited by the Employer for the year ending on such
Valuation Date, (c) the amount of interest credited to the Participant's Account
and (d) the amount of distributions from the Participant's Account.

5.3 Grantor Trust Only.

Benefits under this Plan are payable solely from the general assets of the
Employer. Participants' Accounts shall be utilized solely as a device for the
measurement and determination of the amounts to be paid to Participants under
the Plan. Participant Accounts shall not constitute or be treated as a trust
fund of any kind. Title to and beneficial ownership of any assets which the
Employer may earmark to pay deferred compensation hereunder shall at all times
remain in the Employer and Participants shall have no interest in any specific
assets of the Employer by virtue of this Plan. Notwithstanding the foregoing,
the Employer intends to finance its obligation hereunder via the Trust Agreement
dated January 31, 1995 between the Employer and Johnson Heritage Trust Company
(the "Trust"), which is intended to be a grantor trust, in the event of a Change
of Control Event as defined in such Trust.

-7-

<PAGE> 11

It is the intention of all parties involved that the arrangements be unfunded
for tax purposes and for purposes of Title I of ERISA. The Trust and any assets
held by the Trust to assist it in meeting its obligations under the Plan are
intended to conform to the terms of the model trust requirements set forth in
Revenue Procedure 92-64 issued by the Internal Revenue Service.

-8-

<PAGE> 12

ARTICLE VI

Distribution

6.1 Distribution.

Except as otherwise may be provided in this Article VI, distributions of a
Participant's Account shall be made to the Participant (or the Participant's
Beneficiary in the event of the Participant's death before all amounts are paid)
in ten (10) annual installments, with the first installment to be paid in
January of the year following the Calendar Year in which the Participant
retires or attains age 62 and with subsequent installments to be paid
in each succeeding January until the Participant's Account shall be distributed
in full. The first installment shall be equal to one tenth (1/10th) of the total
amount credited to the Participant's Account as of the preceding Valuation Date
and in each subsequent year the Participant (or the Participant's Beneficiary,
in the event of the Participant's death) shall receive that fraction of the
Participant's Account, valued as of the preceding Valuation Date, of which the
numerator is 1 and the denominator is the total number of remaining installments
to be made to the Participant.

6.2 Committee Discretion to Accelerate.

Notwithstanding the above, a Participant or Beneficiary, as applicable, may
request, at least 6 months prior to the date commencement of distributions under
Section 6.1 is scheduled to begin, to have the Participant's interest in the
Participant's Account paid at an earlier date, over a shorter period or in a
single lump sum. The Committee retains the power and discretion to grant or
deny any request or to otherwise determine, absent any request, to accelerate
payments hereunder or make payment of the remainder of a Participant's Account
in a single sum (i) at any time after the Participant's termination of
employment with the Employer or (ii) following Plan termination, at any time,
whether before or after the Participant's termination of employment with the
Employer.

-9-

<PAGE> 13

6.3 Change in Law.

Notwithstanding any of the above, the Committee may direct payment of a
Participant's Account before it otherwise would be payable under this Article VI
if, based on notification from the Internal Revenue Service or a review by the
Committee in light of Internal Revenue Service guidance, the Committee
determines that a Participant has or will recognize income for federal income
tax purposes with respect to amounts that are or will be payable under the Plan
before they are to be paid. Further, the Committee may direct payment of a
Participant's Account before it otherwise would be payable and may terminate a
Participant's participation in the Plan if, based on notification from the
Department of Labor or a review by the Committee in light of Department of Labor
guidance, the Committee determines that an individual's participation in the
Plan jeopardizes the Plan's status as a plan described in Section 12.6 hereof.

-10-

<PAGE> 14

ARTICLE VII

Administration

7.1 In General.

The Committee has such powers as may be necessary to direct the general
administration of the Plan, including the powers given to it elsewhere in this
document and including (but not by way of limitation) the following powers:

(a) to construe and interpret the Plan and to make equitable adjustments
for any mistakes or errors made in the administration thereof;

(b) To prescribe such procedures, rules and regulations as it shall deem
necessary or proper for the efficient administration of the Plan or
any of its duties hereunder;

(c) to decide questions of eligibility and determine the amount, manner
and time of payment of any benefits and to direct the payment of the
same by the Employer;

(d) to prescribe the form and manner of application for any benefits
hereunder and forms to be used in the general administration hereof;
and

(e) to receive from the Employer and Participants or their Beneficiaries
such information as shall be necessary for the proper administration
of the Plan.

7.2 Committee Discretion.

The Committee has full and complete discretionary authority to determine
eligibility for benefits, to construe the terms of the Plan and to decide any
matter presented through the claims review procedure. Any final determination by
the Committee shall be binding on all parties and afforded the maximum deference
allowed by law. If challenged in court, such determination shall not be subject
to de novo review and shall not be overturned unless proven to be arbitrary and
capricious upon the evidence considered by the Committee at the time of such
determination.

-11-

<PAGE> 15

7.3 Committee Members' Conflict of Interest.

A member of the Committee who is covered hereunder may not vote or decide
upon any matter relating solely to himself or vote in any case in which his
individual right to any benefit under the Plan is particularly involved nor may
a member of the Board who is covered hereunder vote to amend the Plan regarding
the timing of distributions or vote with respect to direct or indirect
termination of the Plan. Decisions shall be made by remaining Committee or Board
members even if there is no quorum under normal Committee or Board rules.

7.4 Governing Law.

This Plan shall be construed in accordance with the laws of the State of
Wisconsin to the extent not preempted by the provisions of the Employee
Retirement Income Security Act of 1974 or other federal law.

7.5 Expenses.

All expenses and costs incurred in connection with the administration and
operation of the Plan shall be borne by the Employer and/or the Trust.

7.6 Minor or Incompetent Payees.

If a person to whom a benefit is payable is a minor or is otherwise
incompetent by reason of a physical or mental disability, the Committee may
cause the payments due to such person to be made to another person for the first
person's benefit without any responsibility to see to the application of such
payment. Such payments shall operate as a complete discharge of the obligations
to such person under the Plan.

7.7 Withholding.

To the extent required by law, the Employer shall withhold any taxes
required to be withheld by the federal or any state or local government from
payments made hereunder or from other amounts paid to the Participant by the
Employer. To the extent that FICA taxes are required to be withheld from the
Participant with respect to

-12-

<PAGE> 16

amounts credited under this Plan and no amounts are to be paid to the
Participant hereunder or otherwise from the Employer from which such FICA taxes
may be withheld, then the Employer shall pay such FICA taxes and the
Participant's Account hereunder shall be reduced by the amount of the FICA tax
paid.

7.8 Indemnification.

Except as otherwise provided by law, neither the Board or the Committee nor
any individual member of the Board or the Committee, nor the Employer, nor any
officer, shareholder or employee of the Employer shall be liable for any error
of judgment, action or failure to act hereunder or for any good faith exercise
of discretion, excepting only liability for gross negligence or willful
misconduct. Such individuals and entities shall be indemnified and held harmless
by the Employer against any and all claims, damages, liabilities, costs and
expenses (including attorneys' fees) arising by reason of any good faith error
of omission or commission with respect to any responsibility, duty or action
hereunder. Nothing herein contained shall preclude the Employer from purchasing
insurance to cover potential liability of one or more persons who serve in an
administrative capacity with respect to the Plan.

-13-

<PAGE> 17

ARTICLE VIII

Benefits Unfunded

The right of any individual to receive payment under the provisions of this
Plan shall be an unsecured claim against the general assets of the Employer, and
no provisions contained in this Plan, nor any action taken pursuant to this
Plan, shall be construed to give any individual at any time a security interest
in any asset of the Employer, of any affiliated company, or of the stockholders
of the Employer. The liabilities of the Employer to any individual pursuant to
this Plan shall be those of a debtor pursuant to such contractual obligations as
are created by this Plan and to the extent any person acquires a right to
receive payment from the Employer under this Plan, such right shall be no
greater than the right of any unsecured general creditor of the Employer.

-14-

<PAGE> 18

ARTICLE IX

Nonalienation of Benefits

All benefits payable hereunder are for the sole use and benefit of the
Participants and their Beneficiaries and, to the extent permitted by law, shall
be free, clear and discharged of and from, and are not to be in any way liable
for, debts, contracts or agreements, now contracted or which may hereafter be
contracted and from all claims and liabilities now or hereafter incurred by any
Participant or Beneficiary covered by this Plan. No Participant or Beneficiary
covered by this Plan shall have the right to anticipate, surrender, encumber,
alienate or assign, whether voluntarily or involuntarily, any of the benefits to
become due hereunder unto any person or person upon any terms whatsoever, and
any attempt to do so shall be void.

-15-

<PAGE> 19

ARTICLE X

Claims Procedure

10.1 Claims.

If the Participant or the Participant's Beneficiary (hereinafter refereed
to as "claimant") believes he is being denied any benefit to which he is
entitled under this Plan for any reason, he may file a written claim with the
member of the Committee designated as the claims administrator. The claims
administrator shall review the claim and notify the claimant of his decision
within 90 days of receipt of such claim, unless the claimant receives written
notice prior to the end of the 90 day period stating that special circumstances
require an extension of the time for decision. The claim administrator's
decision shall be in writing, sent by first class mail to the claimant's last
known address, and if a denial of the claim, shall contain the specific reasons
for the denial, reference to pertinent provisions of the Plan on which the
denial is based, a description of any additional information or material
necessary to perfect the claim, and an explanation of the claims review
procedure.

10.2 Review Procedure.

A claimant is entitled to request the entire Committee to review any denial
by written request to the Committee within 60 days of receipt of the denial.
Absent a request for review within the 60-day period, the claim will be deemed
to be conclusively denied. The Committee shall afford the claimant or his
authorized representative the opportunity to review all pertinent documents and
submit issues and comments in writing and shall render a review decision in
writing, all within 60 days after receipt of a request for review (provided that
in special circumstances the Committee may extend the time for decision by not
more than 60 days upon written notice to the claimant). The Committee's review
decision shall contain specific reasons for the decision and reference to the
pertinent provisions of the Plan.

-16-

<PAGE> 20

ARTICLE XI

Amendment and Termination

The Board of Directors may amend or terminate this Plan at any time;
provided, however, that no such amendment or termination shall deprive any
Participant or Beneficiary of any amounts accrued to him under this Plan prior
to the date of such amendment or termination. If this Plan is terminated, a
Participant's Account hereunder as of the date of termination shall continue to
be credited with interest under Article V and be paid in accordance with the
terms of the Plan as in effect on such date of termination (subject to the
Committee's discretion with respect to distributions, as described in Article
VI); provided, however, that no additional contributions shall be credited after
such termination. Notwithstanding any other provision of the Plan to the
contrary, the Employer shall always have the right to prospectively amend the
manner of crediting interest under the Plan.

-17-

<PAGE> 21

ARTICLE XII

Miscellaneous

12.1 No Right to Continued Employment.

Neither participation in this Plan, nor the payment of any benefit
hereunder, shall be construed as giving to the Participant any right to be
retained in the service of the Employer, or limiting in any way the right of the
Employer to terminate the Participant's employment at any time. Nor does the
participation in this Plan guarantee the Participant the right to receive any
specific amount of compensation or bonus, such amount being determined solely
under such applicable compensation or bonus arrangement as established by the
Employer.

12.2 Impact on Other Plans.

No amounts credited to any Participant under this Plan and no amounts paid
from this Plan will be taken into account as "wages", "salary", "base pay" or
any other type of compensation when determining the amount of any payment or
allocation, or for any other purpose, under any other qualified or nonqualified
pension or profit sharing plan of the Employer, except as otherwise may be
specifically provided by such plan.

12.3 Severability.

If any provisions of the Plan shall be held illegal or invalid for any
reason, said illegality or invalidity shall not affect the remaining parts of
the Plan, but this Plan shall be construed and enforced as if said illegal and
invalid provisions had never been included herein.

12.4 Gender and Number.

Masculine gender shall include the feminine, and the singular shall include
the plural, unless the context clearly indicates otherwise.

12.5 Evidence Conclusive.

The Employer, the Committee and any person or persons involved

-18-

<PAGE> 22

in the administration of the Plan shall be entitled to rely upon any
certification, statement, or representation made or evidence furnished by any
person with respect to any facts required to be determined under any of the
provisions of the Plan, and shall not be liable on account of the payment of any
monies or the doing of any act or failure to act in reliance thereon. Any such
certification, statement, representation, or evidence, upon being duly made or
furnished, shall be conclusively binding upon the person furnishing it but not
upon the Employer, the Committee or any other person involved in the
administration of the Plan. Nothing herein contained shall be construed to
prevent any of such parties from contesting any such certification, statement,
representation, or evidence or to relieve any person from the duty of submitting
satisfactory proof of any fact.

12.6 Status of Plan Under ERISA.

The Plan is intended to be an unfunded plan maintained by an Employer
primarily for the purpose of providing deferred compensation for a select group
of management or highly compensated employees, as described in Section 201(2),
Section 301(a) (3), Section 401(a) (1) and Section 4021(b) (6) of the Employee
Retirement Income Security Act of 1974, as amended.

12.7 Name and Address Changes.

Each Participant shall keep his name and address on file with the Employer
and shall promptly notify the Employer of any changes in his name or address.
All notices required or contemplated by this Plan shall be deemed to have been
given to a Participant if mailed with adequate postage prepaid thereon addressed
to him at his last address on file with the Employer. If any check in payment of
a benefit hereunder (which was mailed to the last address of the payee as shown
on the Employer's records) is returned unclaimed, further payments shall be
discontinued unless evidence is furnished that the recipient is still alive.

-19-

<PAGE> 1
BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

1999 Annual Report on Form 10-K

EXHIBIT NO. 10.19

CONSULTANT REIMBURSEMENT ARRANGEMENT

Adopted Effective July 1, 1999

RESOLVED, that Executive Officers of the Company may be reimbursed for up
to $5,000 of expenditures incurred for personal Financial Counseling, Estate
Planning or Tax Preparation.

<PAGE> 1
BRIGGS & STRATTON CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXHIBIT NO. 11

COMPUTATION OF EARNINGS PER SHARE OF COMMON STOCK

<TABLE>
<CAPTION>
Fiscal Year Ended
-------------------------------------------
June 27, 1999 June 28, 1998 June 29, 1997
------------- ------------- -------------
<S> <C> <C> <C>
COMPUTATIONS FOR STATEMENTS OF INCOME

Net income $ 106,101 $ 70,645 $ 61,565
============= ============= =============
Basic earnings per share of common stock:
Average shares of common stock outstanding 23,344 24,666 28,551
============= ============= =============
Basic earnings per share of common stock $ 4.55 $ 2.86 $ 2.16
============= ============= =============
Diluted earnings per share of common stock:
Average shares of common stock outstanding 23,344 24,666 28,551
Incremental common shares applicable to common
stock options based on the common stock average
market price during the period 114 109 127
Incremental common shares applicable to restricted
common stock based on average market price during
the period -- -- 1
------------- ------------- -------------
Average common shares assuming dilution 23,459 24,775 28,678
============= ============= =============
Fully diluted earnings per average share of common
stock, assuming conversion of all applicable securities $ 4.52 $ 2.85 $ 2.15
============= ============= =============
</TABLE>

<PAGE> 1

BRIGGS & STRATTON CORPORATION

EXHIBIT NO. 12

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(dollars in thousands)

<TABLE>
<CAPTION>
Fiscal Year Ended
--------------------------------------------
June 27, 1999 June 28, 1998 June 29, 1997
------------- ------------- -------------
<S> <C> <C> <C>
Net income $ 106,101 $ 70,645 $ 61,565
Add:
Interest 17,024 19,352 9,880
Income tax expense and other taxes on income 63,670 42,500 37,740
Fixed charges of unconsolidated subsidiaries 279 510 668
------------- ------------- -------------
Earnings as defined $ 187,074 $ 133,007 $ 109,853
============= ============= =============
Interest $ 17,024 $ 19,352 $ 9,880
Fixed charges of unconsolidated subsidiaries 279 510 668
------------- ------------- -------------
Fixed Charges as defined $ 17,303 $ 19,862 $ 10,548
============= ============= =============
Ratio of earnings to fixed charges 10.8x 6.7x 10.4x
============= ============= =============
</TABLE>

<PAGE> 1

BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

EXHIBIT NO. 21
SUBSIDIARIES OF THE REGISTRANT

State or Country Percent Voting
Subsidiary of Incorporation Stock Owned
---------- ---------------- --------------

<S> <C> <C>
Briggs & Stratton AG Switzerland 100%

Briggs & Stratton Australia Pty. Limited Australia 100%

Briggs & Stratton Austria GmbH Austria 100%

Briggs & Stratton Canada Inc. Canada 100%

Briggs & Stratton Czech Republic s.r.o. Czech Republic 100%

Briggs & Stratton France, S.A.R.L. France 100%

Briggs & Stratton Germany GmbH Germany 100%

Briggs & Stratton International, Inc. Wisconsin 100%

Briggs & Stratton International Sales Corp. Virgin Islands 100%

Briggs & Stratton Mexico S.A. de C.V. Mexico 100%

Briggs & Stratton Netherlands B.V. Netherlands 100%

Briggs & Stratton New Zealand Limited New Zealand 100%

Briggs & Stratton South Africa Pty. South Africa 100%

Briggs & Stratton Sweden AB Sweden 100%

Briggs & Stratton U.K. Limited United Kingdom 100%

Briggs & Stratton Daihatsu, Inc. Wisconsin 100%

Future Parkland Development, Inc. Wisconsin 100%
</TABLE>

<PAGE> 1

BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES

EXHIBIT NO. 23

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation of our
reports included (or incorporated by reference) in this Form 10-K, into the
Company's previously filed Registration Statements, File No. 33-39113, File No.
333-25271 and File No. 33-54357.

ARTHUR ANDERSEN LLP

Milwaukee, Wisconsin,
September 3, 1999.

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF BRIGGS & STRATTON CORPORATION FOR THE FISCAL YEAR ENDED
JUNE 27, 1999, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-27-1999
<PERIOD-START> JUN-29-1998
<PERIOD-END> JUN-27-1999
<CASH> 60,806
<SECURITIES> 0
<RECEIVABLES> 194,096
<ALLOWANCES> 0
<INVENTORY> 137,448
<CURRENT-ASSETS> 459,146
<PP&E> 859,848
<DEPRECIATION> 455,394
<TOTAL-ASSETS> 875,885
<CURRENT-LIABILITIES> 282,502
<BONDS> 0
0
0
<COMMON> 289
<OTHER-SE> 365,910
<TOTAL-LIABILITY-AND-EQUITY> 875,885
<SALES> 1,501,726
<TOTAL-REVENUES> 1,501,726
<CGS> 1,196,371
<TOTAL-COSTS> 1,196,371
<OTHER-EXPENSES> 118,560
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 17,024
<INCOME-PRETAX> 169,771
<INCOME-TAX> 63,670
<INCOME-CONTINUING> 106,101
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 106,101
<EPS-BASIC> 4.55
<EPS-DILUTED> 4.52

</TABLE>