Document:

EXHIBIT 10.12

 

BRIGGS & STRATTON
CORPORATION AND SUBSIDIARIES

 

2005 Annual Report on Form 10-K

 

AMENDED AND RESTATED

DIRECTOR’S PREMIUM OPTION AND
STOCK GRANT PROGRAM

 

Effective  August 10, 2005

 

 

As Amended and Restated

Effective 8-10-05

 

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 and August 10,
2005

 

2

 

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 Company awards grants to Senior Executives. 
The PSOs shall constitute non-qualified stock options.  Unrestricted shares will be awarded when the
PSOs are awarded.

 

1

 

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.

 

2

 

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 Stock
Award Program or Incentive Compensation 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.

 

3Exhibit 10.1

 

RETENTION
AND CONSULTING AGREEMENT

 

THIS RETENTION AND CONSULTING AGREEMENT (this
“Agreement”) is made as of September 12, 2005 by and between Briggs &
Stratton Corporation, a Wisconsin corporation having its principal business
office at 12301 West Wirth Street, Wauwatosa, Wisconsin 53222 (the “Company”),
and Mark R. Hazeltine (“Mr. Hazeltine”).

 

WHEREAS Mr. Hazeltine is a key employee
in the Company’s sales organization who has detailed knowledge of the Company’s
customers and their requirements for outdoor power equipment, and

 

WHEREAS the Company desires to ensure that Mr. Hazeltine
continues to work full-time for the Company until his retirement at age 65 and
that thereafter he provides consulting services to the Company for up to two
years with reasonable provisions relating to noncompetition,

 

NOW, THEREFORE, in consideration of the
premises and the mutual promises hereinafter set forth, the parties agree as
follows:

 

1.  Stay
Bonus.  The Company will pay Mr. Hazeltine
$150,000 on the date of his retirement from the Company and $100,000 on the
first anniversary of the date of his retirement in the event that Mr. Hazeltine
continues to be employed full-time by the Company until he reaches the
retirement age of 65.  If prior to his
retirement Mr. Hazeltine dies or becomes disabled as defined in the
Company’s benefit plans or the Company terminates his employment without cause,
the foregoing payments will be made to Mr. Hazeltine or his estate on January 1,
2008 and January 1, 2009.

 

2.  Health
Benefits.  The Company will pay the
cost of providing health care coverage for Mr. Hazeltine’s spouse under
the Company’s current or successor health care plans until she reaches the age
of 65 in the event that Mr. Hazeltine continues to be employed full-time
by the Company until he reaches the retirement age of 65, or in the event that
prior to retirement Mr. Hazeltine dies or becomes disabled as defined in
the Company’s benefit plans or the Company terminates his employment without
cause.

 

3.  Post-Retirement
Consulting Services.  Mr. Hazeltine
will provide consulting services to the Company for up to 24 months after his
retirement from the Company for a fee of $16,667 per month.  Such services shall be provided in connection
with the following activities, when and as requested by the Company’s Vice
President – Sales & Marketing:

 

(a)                      Provide
advice to management relating to the Company’s current and future business
relationships with original equipment manufacturers and retailers of outdoor
power equipment worldwide.

 

1

 

(b)                     Provide
advice to management relating to implementation and optimization of the Company’s
strategic plan and pricing strategy as they affect original equipment
manufacturers and retailers of outdoor power equipment worldwide.

(c)                      Assist
management in training employees of the Company who are engaged in the sales
and marketing functions.

(d)                     At management’s
request, communicate with designated customers of the Company and provide other
services as assigned.

 

The parties anticipate Mr. Hazeltine
will spend approximately 20-30 hours per week providing the foregoing
consulting services and agree the Company will reimburse Mr. Hazeltine for
reasonable travel and living expenses related to performing such services.  Mr. Hazeltine will submit invoices to
the Company monthly stating the specific dates on which he incurred such
expenses with appropriate documentation of the amount of such expenses.

 

The foregoing consulting services and monthly
fee shall terminate after the first 12 months of the consulting relationship
between Mr. Hazeltine and the Company, unless they mutually agree by the
end of the 9th month of the first year of the relationship to
continue it for the second 12-month period.

 

Standard of Performance.  Mr. Hazeltine shall perform his
consulting services hereunder in compliance with applicable law and with the
same degree of skill and care he observed in working as an employee of the
Company.  All such services shall reflect
his best professional knowledge, skill and judgment.

 

4.  Information
Rights and Non-Disclosure.  The
Company shall have full and unrestricted rights to use and publish any
information provided by Mr. Hazeltine in performing services under this
Agreement.  Except with the prior written
approval of an authorized representative of the Company, Mr. Hazeltine
will not, either during the term of this Agreement or thereafter, publish,
disclose or otherwise make known any information concerning the Company, its
business plans, or its relationships with customers which Mr. Hazeltine
becomes aware of in the course of his work under this Agreement.

 

5.  Records.  Mr. Hazeltine will keep such written
records and make such reports concerning his consulting services as may be
requested by the Company.  Mr. Hazeltine
will deliver to the Company, at its request, all such records, together with
any written material which may have been furnished to him by the Company in
connection with this Agreement, and thereafter he will make no further use or
utilization of any such material and information without the prior written
consent of the Company.

 

6.  Other
Obligations.  Mr. Hazeltine
agrees that in performing consulting services under this Agreement he will
comply with all applicable Company policies concerning business practices.  Mr. Hazeltine further agrees that (i) until
90 days after the end of the initial 12 months of the consulting relationship
(if the relationship terminates after 12 months), or (ii) until the end of
the full 24 month period of the consulting relationship (if the relationship
continues for 24 months), he will not accept employment with, provide services
to, or otherwise engage in any work or business activity for any company that
is a competitor or direct or indirect customer of 

 

2

 

the Company insofar as such employment, service, work or business may
involve or be closely related to the consulting services provided by Mr. Hazeltine
under this Agreement, or where any third party which competes with the Company
in the field of such consulting services might be benefited by the services
rendered or information gained by Mr. Hazeltine under this Agreement.

 

7.  Contractor
Status.  In furnishing consulting
services pursuant to this Agreement after his retirement, Mr. Hazeltine
will at all times be acting as an independent contractor.  The methods and means of performance of all
tasks assigned to Mr. Hazeltine under this Agreement will be entirely at
his discretion.  Mr. Hazeltine will
not by reason of his post-retirement consulting services hereunder be
considered an employee of the Company or be entitled to participate in or to
receive any benefit or right under any of the Company’s employee benefit or
welfare plans, including without limitation Company employee insurance,
pension, savings and stock bonus plans.

 

8.  Termination.  This Agreement may be terminated by mutual
agreement of the parties in writing or unilaterally by one party if the other
party materially breaches any of its obligations under this Agreement, provided that the obligations of Mr. Hazeltine under
Sections 4, 5 and 6 above shall survive and not be affected by any termination
of this Agreement.  Upon termination, Mr. Hazeltine
will be paid for consulting services rendered and reimbursable expenses
incurred up to the date of such termination and not thereafter.  Payment upon termination will be accepted by Mr. Hazeltine
in full satisfaction of all claims and demands against the Company in
connection with this Agreement.

 

9.  Complete
Agreement.  This Agreement is the
entire and only agreement between the parties with respect to the subject
matter, except for the provisions of Mr. Hazeltine’s two employment
agreements with the Company.  All
post-retirement consulting services performed by Mr. Hazeltine for the
Company shall be subject to the provisions of this Agreement.  All prior and collateral understandings,
agreements and promises with respect thereto are merged herein.  This Agreement may not be modified, waived,
or extended unless in writing signed by the party sought to be bound thereby.

 

10.  Dispute
Resolution.  (i) Any dispute,
controversy or claim arising out of or relating to this Agreement or any term
or provision of this Agreement, including without limitation any claims of
breach, termination or invalidity thereof, (ii) any matter subject to
arbitration under any provision of this Agreement, and (iii) any other
matter which the parties agree to submit to arbitration shall be settled by
arbitration in accordance with the Commercial Arbitration Rules of the
American Arbitration Association, and judgment on the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof.  Such arbitration proceedings shall be held in
Milwaukee, Wisconsin.

 

Notwithstanding the foregoing, the Company at
all times shall have the right to bring an action to enforce the covenants and
seek the remedies set forth in Sections 4, 5 and 6 of this Agreement through
the courts as it deems necessary or desirable in order to protect its
proprietary and other confidential information or to prevent the occurrence of
any event which the Company believes will cause it to suffer immediate and
irreparable harm or damage.  The parties
agree that any such action may be brought in a state or federal court located
within Milwaukee, Wisconsin.  The parties
waive any and all objections to jurisdiction or venue.

 

3

 

In the event that Mr. Hazeltine or the
Company is required to bring an arbitration proceeding or any legal action to
enforce the terms of this Agreement, the prevailing party shall, in addition to
any other remedies available to it, be entitled to recover its reasonable
attorneys’ fees and costs from the losing party.

 

11.  Applicable
Law.  This Agreement shall be
governed by the laws of the State of Wisconsin.

 

IN WITNESS WHEREOF, the Company and the Mr. Hazeltine
have signed this Agreement as of the date first above written.

 

	
  MARK R. HAZELTINE

  	
   

  	
  BRIGGS & STRATTON CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Mark R. Hazeltine

  	
   

  	
  By

  	
  /s/ John S.
  Shiely

  	
   

  
	
   

  	
   

  	
   

  	
  John S.
  Shiely

  
	
   

  	
   

  	
   

  	
  Chairman,
  President & CEO

  

 

4

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