BRIGGS & STRATTON CORPORATION

 

FORM 10-Q for Quarterly Period Ended September 26, 2004

 

Exhibit No. 10.12

 

AMENDED AND RESTATED

DIRECTOR’S PREMIUM OPTION AND STOCK GRANT PROGRAM

 

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As Amended and Restated

Effective 10-29-04

 

BRIGGS & STRATTON CORPORATION

 

DIRECTOR’S PREMIUM OPTION AND STOCK GRANT PROGRAM

 

As adopted by the Board of Directors on April 21, 2004 and amended

on October 20, 2004 to be effective October 29, 2004

 

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BRIGGS & STRATTON CORPORATION

DIRECTOR’S PREMIUM OPTION AND STOCK GRANT PROGRAM

 

1.0 Objectives

 

The Director’s Premium Option and Stock Grant Program (“Program”) is designed to
tie the interests of the Company’s directors to the long term market value added
performance of the Company. In this way, the objectives of directors will be
more closely aligned with those of the Company’s Shareholders. The Program will
allow nonemployee directors to participate in the long-term appreciation in the
equity value of the Company. In general, the Program is structured such that
each nonemployee director receives unrestricted shares and premium options on
the Company’s Stock (“PSOs”) as elements of annual compensation. The PSOs become
exercisable after they have been held for three years, and they expire at the
end of five years. The PSOs are structured so that a fair return must be
provided to the Company’s Shareholders before they become valuable.

 

2.0 Administration

 

The Program shall be administered by the Board of Directors (“Board”).

 

3.0 Stock Subject to Plan

 

The total number of shares reserved and available for distribution as PSOs under
the Program with respect to fiscal 2005 and subsequent years shall be 200,000
shares of the Company’s common stock, par value $0.01 per share (“Stock”). Such
shares may consist, in whole or in part, of treasury or market purchase shares.

 

In the event of any merger, reorganization, consolidation, recapitalization,
stock dividend, stock split or other change in corporate structure affecting the
Stock, such substitution or adjustments shall be made in the aggregate number of
shares reserved for issuance under the Program, and in the number and option
price of shares subject to outstanding PSOs, as may be determined to be
appropriate by the Board, in its sole discretion; provided, however, that the
number of shares subject to any award shall always be a whole number.

 

4.0 Eligibility

 

Each nonemployee director of the Company shall be eligible to participate in the
Program.

 

5.0 Stock Grant

 

For fiscal 2005 and subsequent fiscal years, each nonemployee director of the
Company who serves as a director through the end of the fiscal year shall
receive 400 shares of the Company’s Stock and 4,000 PSOs.

 

PSO grants shall be evidenced by option agreements, the terms and provisions of
which shall be determined by this Program or the Board. These grants will be
awarded at the same time the

 

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Company awards grants to Senior Executives. The PSOs shall constitute
non-qualified stock options.

 

No PSO shall be transferable by the optionee other than by will or by the laws
of descent and distribution, and all PSOs shall be exercisable, during the
optionee’s lifetime, only by the optionee or by the guardian or legal
representative of the optionee, it being understood that the terms “holder” and
“optionee” include the guardian and legal representative of the optionee named
in the option agreement and any person to whom an option is transferred by will
or the laws of descent and distribution.

 

If an optionee’s service as a director terminates by reason of death, any PSO
held by such optionee may thereafter be exercised, to the extent then
exercisable or on such accelerated basis as the Board may determine, for a
period of one year (or such other period as the Board may specify at grant) from
the date of such death or until the expiration of the stated term of such PSO,
whichever period is shorter.

 

When an optionee’s service as a director terminates due to reaching the
mandatory retirement age or due to retirement upon reaching the end of the term
for which elected, a PSO held by such optionee may thereafter be exercised by
the optionee, to the extent it was exercisable at the time of such retirement or
on such accelerated basis as the Board may determine, for a period of three
years (or such shorter period as the Board may specify at grant) from the date
of such retirement or until the expiration of the stated term of such PSO,
whichever period is shorter; provided, however, that if the optionee dies within
such three-year (or such shorter) period, any unexercised PSO held by such
optionee shall, notwithstanding the expiration of such three-year (or such
shorter) period, continue to be exercisable to the extent to which it was
exercisable at the time of death for a period of one year from the date of such
death or until the expiration of the stated term of such PSO, whichever period
is shorter.

 

When an optionee’s service as a director terminates for any reason other than
death or retirement as described above, unless otherwise determined by the Board
at grant, the PSO shall thereupon terminate, except that such PSO, to the extent
then exercisable, may be exercised for the lesser of three months or the balance
of the term. Notwithstanding the foregoing, if an optionee’s service as a
director terminates at or after a Change in Control (as defined in the Company’s
Stock Incentive Plan), other than by death or retirement (as described above),
any PSO held by such optionee shall be exercisable for the lesser of (x) six
months and one day, and (y) the balance of such PSO’s term.

 

6.0 Term

 

All PSOs shall be exercisable beginning on the third anniversary of the date of
grant, and shall terminate on the fifth anniversary of the date of grant, unless
sooner exercised or the Board determines other dates at grant.

 

7.0 Exercise Price

 

The exercise price for PSOs granted hereunder shall be the exercise price for
PSOs granted under the Premium Option and Restricted Stock Program for Senior
Executives for that fiscal year.

 

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8.0 Definitions

 

All capitalized terms used herein that are not otherwise defined shall have the
same meaning given to them in the EVA Plan, Premium Option and Restricted Stock
Program or Stock Incentive Plan.

 

9.0 Amendments and Termination

 

The Board may amend, alter, or discontinue the Program but no amendment,
alteration or discontinuation shall be made which would impair the rights of an
optionee under a PSO granted without the optionee’s or recipient’s consent.

 

The Board may amend the terms of any PSO theretofore granted, prospectively or
retroactively, but no such amendment shall impair the rights of any holder
without the holder’s consent.

 

Subject to the above provisions, the Board shall have authority to amend the
Program to take into account changes in law and tax and accounting rules, as
well as other developments.

 

10.0 Unfunded Status of Program

 

It is presently intended that the Program constitute an “unfunded” plan for
incentive and deferred compensation. The Board may authorize the creation of
trusts or other arrangements to meet the obligations created under the Program
to deliver Stock; provided, however, that, unless the Board otherwise
determines, the existence of such trusts or other arrangements is consistent
with the “unfunded” status of the Program.

 

11.0 General Provisions

 

(a) The Board may require each person purchasing shares pursuant to a PSO grant
to represent to and agree with the Company in writing that the optionee or
participant is acquiring the shares without a view to the distribution thereof.

 

All certificates for shares of Stock or other securities delivered under the
Program shall be subject to such stock transfer orders and other restrictions as
the Board may deem advisable under the rules, regulations and other requirements
of the Securities and Exchange Commission, any stock exchange upon which the
Stock is then listed and any applicable Federal or state securities law, and the
Board may cause a legend or legends to be put on any such certificates to make
appropriate reference to such restrictions.

 

(b) Nothing contained in this Program shall prevent the Company, a subsidiary or
affiliate from adopting other or additional compensation arrangements for its
nonemployee directors.

 

(c) The adoption of the Program shall not confer upon any director any right to
continue to serve as a director.

 

(d) The Program and all awards made and actions taken thereunder shall be
governed by and construed in accordance with the laws of the State of Wisconsin.

 

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