Document:

<PAGE>

                         BRIGGS & STRATTON CORPORATION

               FORM 10-Q for Quarterly Period Ended March 31, 2002

                                Exhibit No. 10.2

                    AMENDED AND RESTATED ECONOMIC VALUE ADDED
                           INCENTIVE COMPENSATION PLAN

                             Effective July 1, 2002

<PAGE>

                                                         As Amended and Restated
                                                                Effective 7-1-02

                          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; further amended and restated
           by resolution of the Board of Directors on April 21, 1999,
            further amended by resolutions of the Board of Directors
                    on October 17, 2000, on October 17, 2001
                    effective July 1, 2001, and on April 17,
                           2002 effective July 1, 2002

<PAGE>

                          BRIGGS & STRATTON CORPORATION
                ECONOMIC VALUE ADDED INCENTIVE COMPENSATION PLAN

--------------------------------------------------------------------------------
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 Compensation 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
                     -  Deferred Tax Liabilities or Assets
                          Classified as Current Assets
                     -  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

        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:

                                       2

<PAGE>
               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 10
         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 Officer 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 operating division, service division or sales group, 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 - Capital Charge = 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
                    (-) Eliminate the Pension Income from Overfunded Pension
                        Plans
                  (+/-) 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)

    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.

                                       3

<PAGE>
                                                                    EXHIBIT 10.2

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

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

         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 Chief
         Executive Officer of the Company, and approved by the Committee.

    B.   Nomination and Approval. Each Plan year, the Chief Executive Officer 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 Chief Executive Officer 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>

                             Target         Company                                           Target       Individual
30%       Participant's  x  Incentive  x  Performance         + 70%        Participant's  x  Incentive  x  Performance
           Base Salary       Award          Factor                          Base Salary        Award         Factor

</TABLE>

    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>

                Chief Executive Officer                      100%
                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:

                                       4
<PAGE>
               (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. 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>

               (3) Aggregate Individual Performance Factor. The Individual
                   Performance Factor to be used in the calculation of the
                   Accrued Bonus shall be equal to the average (or weighted
                   average) of one or more Quantifiable and/or Non-Quantifiable
                   Supporting Performance Factors according to relative
                   importance, except that the Non-Quantifiable Supporting
                   Performance Factor shall account for no more than 15% of the
                   Accrued Bonus.

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.

                                       5

<PAGE>

     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. For purposes of this section, the date a
         participant is deemed to be terminated pursuant to disability shall be
         the date the employee begins receiving a monthly Long Term Disability
         Benefit under the Company's Group Insurance Plan.

         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.

         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 - Extraordinary Bonus Accrual +
                 Bank Payout = 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.

                                       6

<PAGE>

         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 to the extent 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.

         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.

                                       7

<PAGE>
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.

     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

                                       8

<PAGE>

         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.

                                       9<PAGE>

                         BRIGGS & STRATTON CORPORATION

               FORM 10-Q for Quarterly Period Ended March 31, 2002

                                  Exhibit 10.3

                   AMENDED AND RESTATED DIRECTOR'S LEVERAGED
                              STOCK OPTION PROGRAM

                             Effective July 1, 2002

<PAGE>

                          BRIGGS & STRATTON CORPORATION

                    DIRECTOR'S LEVERAGED STOCK OPTION PROGRAM

                As adopted by the Board of Directors on April 16,
                1997, effective beginning Fiscal 1998 and amended
             by resolutions effective July 1, 1999 and July 1, 2002

<PAGE>

                          BRIGGS & STRATTON CORPORATION
                     DIRECTOR'S LEVERAGED STOCK OPTION PLAN

1.0      Objectives

The Director's Leveraged Stock Option Plan ("Director's LSO Plan" or "Plan") is
designed to build upon the Company's Economic Value Added Incentive Compensation
Plan ("EVA Plan") for key employees and Leveraged Stock Option Program ("LSO
Program") for Senior Executives by tying 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 Director's LSO Plan will allow nonemployee
directors to participate in the long-term appreciation in the equity value of
the Company. In general, the Plan is structured such that each nonemployee
director may receive options on the Company's Stock ("LSOs"), the number of such
LSOs to be determined by reference to the Company Performance Factor achieved
under the EVA Plan. These LSOs become exercisable after they have been held for
three years, and they expire at the end of ten years. The Director's LSO Plan is
structured so that a fair return must be provided to the Company's Shareholders
before the options become valuable.

2.0      Administration

The Plan 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 pursuant to
LSOs under the Plan shall be 100,000 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 Plan, and in the number and option price
of shares subject to outstanding LSOs, 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
Plan.

5.0      Leveraged Stock Option Grant

For fiscal 1998 and subsequent fiscal years, each nonemployee director of the
Company who serves as a director through the end of the fiscal year shall
receive a number of LSOs determined as follows, based on the Company Performance
Factor achieved under the EVA Plan for that fiscal year:

                                       2

<PAGE>
<TABLE>
<CAPTION>

         Company Performance Factor                  Number of LSOs
         --------------------------                  --------------
        <S>                                         <C>
                  Under .5                                     0
                     .5                                    1,000
                    1.0                                    2,000
                    1.5                                    3,000
                    2.0                                    4,000
                  Over 2.0                           An additional 1,000
                                                     LSOs for each .5
                                                     increase in the Company
                                                     Performance Factor
</TABLE>

LSO grants shall be evidenced by option agreements, the terms and provisions of
which shall be determined by this Director's LSO Plan or the Board. These grants
will be awarded at the same time the Company awards grants to Senior Executives
under the LSO Program. The LSOs shall constitute non-qualified stock options.

No LSO shall be transferable by the optionee other than by will or by the laws
of descent and distribution, and all LSOs 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 LSO
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 LSO,
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, an LSO 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 LSO,
whichever period is shorter; provided, however, that if the optionee dies within
such three-year (or such shorter) period, any unexercised LSO 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 LSO, 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 LSO shall thereupon terminate, except that such LSO, 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

                                       3

<PAGE>

Incentive Plan), other than by death or retirement (as described above),
any LSO held by such optionee shall be exercisable for the lesser of (x)
six months and one day, and (y) the balance of such LSO's term.

6.0      Term

All LSOs shall be exercisable beginning on the third anniversary of the date of
grant, and shall terminate on the tenth 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 LSOs granted hereunder shall be the exercise price for
LSOs granted under the LSO Program for Senior Executives for that fiscal year.

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, LSO Program or Stock Incentive Plan.

9.0      Amendments and Termination

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

The Board may amend the terms of any LSO 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
Plan to take into account changes in law and tax and accounting rules, as well
as other developments.

10.0     Unfunded Status of Plan

It is presently intended that the Plan 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 Plan 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 Plan.

11.0     General Provisions

(a)      The Board may require each person purchasing shares pursuant to an LSO
         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.

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<PAGE>
         All certificates for shares of Stock or other securities delivered
         under the Plan 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 Plan shall prevent the Company, a subsidiary
         or affiliate from adopting other or additional compensation
         arrangements for its nonemployee directors.

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

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

                                       5

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