Document:

Exhibit
4.1

BRIGGS & STRATTON CORPORATION

and

NATIONAL CITY BANK

Rights Agent

Rights Agreement

Dated as of August 7,
1996

(as amended through
August 9, 2006)

 

TABLE OF CONTENTS

	
  

  	
   

  	
  

  	
   

  	
  Page

  	
   

  
	
  Section
  1.

  	
   

  	
  Certain Definitions

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  2.

  	
   

  	
  Appointment of Rights
  Agent

  	
   

  	
  8

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  3.

  	
   

  	
  Issue of Right
  Certificates.

  	
   

  	
  8

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  4.

  	
   

  	
  Form of Right
  Certificates

  	
   

  	
  9

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  5.

  	
   

  	
  Countersignature and
  Registration

  	
   

  	
  10

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.

  	
   

  	
  Transfer, Split Up,
  Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or
  Stolen Right Certificates

  	
   

  	
  10

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  7.

  	
   

  	
  Exercise of Rights;
  Purchase Price; Expiration Date of Rights

  	
   

  	
  11

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  8.

  	
   

  	
  Cancellation and
  Destruction of Right Certificates

  	
   

  	
  12

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  9.

  	
   

  	
  Reservation and
  Availability of Common Shares

  	
   

  	
  13

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  10

  	
   

  	
  Common Shares Record
  Date

  	
   

  	
  13

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  11

  	
   

  	
  Adjustment of Purchase
  Price, Number of Shares or Number of Rights

  	
   

  	
  14

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  12.

  	
   

  	
  Certificate of Adjusted
  Purchase Price or Number of Shares

  	
   

  	
  20

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  13.

  	
   

  	
  Consolidation, Merger,
  Share Exchange or Sale or Transfer of Assets or Earning Power

  	
   

  	
  21

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  14.

  	
   

  	
  Fractional Rights and
  Fractional Shares

  	
   

  	
  22

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  15.

  	
   

  	
  Rights of Action

  	
   

  	
  22

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  16.

  	
   

  	
  Agreement of Right
  Holders

  	
   

  	
  23

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  17.

  	
   

  	
  Right Certificate
  Holder Not Deemed a Shareholder

  	
   

  	
  23

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  18.

  	
   

  	
  Concerning the Rights
  Agent

  	
   

  	
  23

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  19.

  	
   

  	
  Merger or Consolidation
  or Change of Name of Rights Agent

  	
   

  	
  24

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  20.

  	
   

  	
  Duties of Rights Agent

  	
   

  	
  24

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  21.

  	
   

  	
  Change of Rights Agent

  	
   

  	
  26

  	
   

  

 

 i
 

 

 

	
  Section 22.

  	
   

  	
  Issuance of New Right
  Certificates

  	
   

  	
  27

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  23.

  	
   

  	
  Redemption

  	
   

  	
  27

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  24.

  	
   

  	
  Exchange

  	
   

  	
  30

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  25.

  	
   

  	
  Notice of Certain
  Events

  	
   

  	
  31

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  26.

  	
   

  	
  Notices

  	
   

  	
  31

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  27.

  	
   

  	
  Supplements and
  Amendments

  	
   

  	
  32

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  28.

  	
   

  	
  Successors

  	
   

  	
  32

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  29.

  	
   

  	
  Determinations and
  Actions by the Board of Directors

  	
   

  	
  32

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  30.

  	
   

  	
  Benefits of this
  Agreement

  	
   

  	
  33

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  31.

  	
   

  	
  Severability

  	
   

  	
  33

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  32.

  	
   

  	
  Governing Law

  	
   

  	
  33

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  33.

  	
   

  	
  Counterparts

  	
   

  	
  33

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  34.

  	
   

  	
  Descriptive Headings

  	
   

  	
  33

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signatures

  	
   

  	
   

  	
   

  	
  34

  	
   

  

 

Exhibit A — Form of Right Certificate

Exhibit B — Summary of Rights to Purchase Common Shares

 ii

RIGHTS AGREEMENT

Agreement, dated as of August 7, 1996, as amended
through August 9, 2006, between Briggs & Stratton Corporation, a Wisconsin
corporation (the “Company”), and National City Bank (the “Rights Agent”).

The Board of Directors of the Company has authorized
and declared a dividend of one common share purchase right (a “Right”) for each
Common Share (as hereinafter defined) of the Company outstanding on August 19,
1996 (the “Record Date”) payable on such date, each Right representing the
right to purchase one-half of one Common Share, upon the terms and subject to
the conditions herein set forth, and has further authorized and directed the
issuance of one Right with respect to each Common Share that shall become
outstanding between the Record Date and the earliest of the Distribution Date,
the Redemption Date and the Final Expiration Date (as such terms are
hereinafter defined).

Accordingly, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:

Section 1.               Certain Definitions.  For purposes of this Agreement, the following
terms have the meanings
indicated:

(a)           “Acquiring Person” shall mean any
Person (as such term is hereinafter defined) who or which, together with all
Affiliates and Associates (as such terms are hereinafter defined) of such
Person, shall be the Beneficial Owner (as such term is hereinafter defined) of
20% or more of the Common Shares of the Company then outstanding, but shall not
include the Company, any Subsidiary (as such term is hereinafter defined) of
the Company, any employee benefit plan of the Company or any Subsidiary of the
Company, any entity holding Common Shares for or pursuant to the terms of any
such plan, or any trustee, administrator or fiduciary of such a plan.

Notwithstanding
the foregoing, (i) no Person who or which, at the close of business on August
7, 1996, shall have been the Beneficial Owner of 20% or more of the Common
Shares of the Company then outstanding shall be deemed an “Acquiring Person”;
provided, however, that, if a Person is, at the close of business on the date
hereof, the Beneficial Owner of 20% or more of the Common Shares of the Company
then outstanding and shall thereafter become the Beneficial Owner of additional
Common Shares of the Company at any time that the Person is or thereby becomes
the Beneficial Owner of 20% or more of the Common Shares of the Company then
outstanding (other than Common Shares acquired solely as a result of corporate
action of the Company not caused, directly or indirectly, by such Person), then
such Person shall be deemed to be an “Acquiring Person”; and (ii) no Person
shall become an “Acquiring Person” as a result of an acquisition of Common
Shares by the Company which, by reducing the number of shares outstanding,
increases the proportionate number of shares beneficially owned by such Person
to 20% or more of the Common Shares of the Company then outstanding; provided,
however, that if a Person would, but for the provisions of this clause (ii),
become an Acquiring Person by reason of share purchases by the Company and
shall, after such share purchases by the Company, become 

 

the Beneficial Owner of any additional Common Shares
of the Company at any time that the Person is or thereby becomes the Beneficial
Owner of 20% or more of the Common Shares of the Company then outstanding
(other than Common Shares acquired solely as a result of corporate action of
the Company not caused, directly or indirectly, by such Person), then such
Person shall be deemed to be an “Acquiring Person”.

Notwithstanding
the foregoing, if the Board of Directors of the Company determines in good
faith that a Person who would otherwise be an “Acquiring Person”, as defined
pursuant to the foregoing provisions of this paragraph (a), has become such
inadvertently, and such Person divests as promptly as practicable a sufficient
number of Common Shares so that such Person would no longer be an “Acquiring
Person,” as defined pursuant to the foregoing provisions of this paragraph (a),
then such Person shall not be deemed to be an “Acquiring Person” for any
purposes of this Agreement.

(b)           “Affiliate” and “Associate” shall
have the respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), as in effect on the date of this Agreement.

(c)           A Person shall be deemed the “Beneficial
Owner” of and shall be deemed to “beneficially own” any securities:

(i)            which such Person or any of such
Person’s Affiliates or Associates beneficially owns, directly or indirectly;

(ii)           which such Person or any of such
Person’s Affiliates or Associates has (A) the right to acquire (whether such
right is exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (other than customary agreements
with and between underwriters and selling group members with respect to a bona
fide public offering of securities), or upon the exercise of conversion rights,
exchange rights, rights (other than these Rights), warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the Beneficial
Owner of, or to beneficially own, securities tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or any of such Person’s
Affiliates or Associates until such tendered securities are accepted for
purchase or exchange; or (B) the right to vote pursuant to any agreement,
arrangement or understanding; provided, however, that a Person shall not be deemed
the Beneficial Owner of, or to beneficially own, any security if the agreement,
arrangement or understanding to vote such security (1) arises solely from a
revocable proxy or consent given to such Person in response to a public proxy
or consent solicitation made pursuant to, and in accordance with, the
applicable rules and regulations promulgated under the Exchange Act and (2) is
not also then reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report); or

(iii)          which are beneficially owned, directly
or indirectly, by any other Person with which such Person or any of such Person’s
Affiliates or Associates 

 2
 

 

has any
agreement, arrangement or understanding (other than customary agreements with
and between underwriters and selling group members with respect to a bona fide
public offering of securities) for the purpose of, or with respect to,
acquiring, holding, voting (except to the extent contemplated by the proviso to
Section 1(c)(ii)(B)) or disposing of any securities of the Company.

Notwithstanding
anything in this definition of Beneficial Ownership to the contrary, the phrase
“then outstanding,” when used with reference to a Person’s Beneficial Ownership
of securities of the Company, shall mean the number of such securities then
issued and outstanding together with the number of such securities not then
actually issued and outstanding which such Person would be deemed to own
beneficially hereunder.

(d)           “Business Day” shall mean any day
other than a Saturday, a Sunday, or a day on which the New York Stock Exchange
or banking institutions in Wisconsin are generally authorized or obligated by
law or executive order to close.

(e)           “Close of business” on any given date
shall mean 5:00 P.M., Milwaukee, Wisconsin time, on such date; provided,
however, that if such date is not a Business Day it shall mean 5:00 P.M.,
Milwaukee, Wisconsin time, on the next succeeding Business Day.

(f)            “Common Shares” when used with
reference to the Company shall mean the shares of common stock, par value $0.01
per share, of the Company.  “Common
Shares” when used with reference to any Person other than the Company shall
mean the capital stock (or equity interest) with the greatest voting power of
such other Person or, if such other Person is a Subsidiary of another Person,
the Person or Persons which ultimately control such first-mentioned Person.

(g)           “Distribution Date” shall have the
meaning set forth in Section 3 hereof.

(h)           “Final Expiration Date” shall have
the meaning set forth in Section 7 hereof.

(i)            “Person” shall mean any individual,
firm, corporation or other entity, and shall include any successor (by merger
or otherwise) of such entity.

(j)            “Qualified Offer” shall mean an
offer that has, to the extent required for the type of offer specified, each of
the following characteristics:

(i)            a fully financed all-cash tender
offer or an exchange offer offering at least 70 percent cash and Common Shares
of the offeror (with the amount of such Common Shares to be adjusted to reflect
any decrease in the value of such shares prior to the consummation of the
offer), in each such case for any and all of the outstanding Common Shares of
the Company;

(ii)           an offer that has commenced within
the meaning of Rule 14d-2(a) under the Exchange Act;

 3
 

 

(iii)          an offer whose per-share offer price
(A) is greater than the highest reported market price for the Common Shares of
the Company during the 24-month period immediately preceding the date on which
the offer is commenced within the meaning of Rule 14d-2(a) under the Exchange
Act and (B) represents a reasonable premium above the average of the closing
prices (as determined pursuant to Section 11(d) hereof) for the five
trading days immediately preceding the date on which the offer is commenced,
with, in the case of an offer that includes shares of Common Shares of the
offeror, such per-share offer price being determined using the lower of (1) the
lowest reported market price for Common Shares of the offeror during the five
trading days immediately preceding and the five trading days immediately
following the commencement of such offer within the meaning of Rule 14d-2(a)
under the Exchange Act and (2) the average of the last sale prices (regular
way) of such shares reported in the principal consolidated transaction reporting
system with respect to such shares for the five trading days immediately
preceding the date of any determination; 

(iv)          an offer that (A) is accompanied by a
written opinion, in customary form, of a nationally recognized investment
banking firm that is addressed to the Company and the holders of Common Shares
of the Company other than such Person and states that the price to be paid to
such holders pursuant to the offer is fair from a financial point of view to
such holders and includes any written presentation of such firm showing the
analysis and range of values underlying such conclusions, which written opinion
and any such presentation are updated and provided to the Company within two
Business Days prior to the date such offer is consummated, and (B) within 20
Business Days after the commencement date of the offer within the meaning of
Rule 14d-2(a) under the Exchange Act (or within 10 Business Days after any
increase in the offer consideration), does not result in a nationally
recognized investment banking firm retained by the Board of Directors of the
Company rendering an opinion to the Board of Directors of the Company that the
consideration being offered to the holders of the Common Shares is either
unfair or inadequate;

(v)           if the offer includes Common Shares
of the offeror, an offer pursuant to which (A) the offeror shall permit a
nationally recognized investment banking firm retained by the Board of
Directors of the Company and legal counsel designated by the Company to have
access to such offeror’s books, records, management, accountants and other
appropriate outside advisers for the purposes of permitting such investment
banking firm and such legal counsel to conduct a due diligence review of the
offeror in order to permit such investment banking firm (relying as appropriate
on the advice of such legal counsel) to be able to render an opinion to the
Board of Directors of the Company with respect to whether the consideration
being offered to the holders of the Common Shares of the Company is fair or adequate,
and (B) within 10 Business Days after such investment banking firm shall have
notified the Company and the offeror that it had completed the due diligence
review to its satisfaction (or following completion of such due diligence
review within 10 Business Days after any increase in the consideration being
offered), such investment banking firm does 

 4
 

 

not render an
opinion to the Board of Directors of the Company that the consideration being
offered to the holders of the Common Shares of the Company is either unfair or
inadequate and such investment banking firm does not after the expiration of
such 10 Business Day period render an opinion to the Board of Directors of the
Company that the consideration being offered to the holders of the Common Shares
of the Company has become either unfair or inadequate based on a subsequent
disclosure or discovery of a development or developments that have had or are
reasonably likely to have a material adverse affect on the value of the Common
Shares of the offeror;

(vi)          an offer that is subject only to the
minimum tender condition described below in item (ix) of this definition and
other usual and customary terms and conditions, which conditions shall not
include any financing, funding or similar condition or any requirements with
respect to the offeror or its agents being permitted any due diligence with
respect to the books, records, management, accountants and other outside
advisers of the Company;

(vii)         an offer pursuant to which the Company
has received an irrevocable written commitment of the offeror that the offer
will remain open for at least 60 Business Days and, if a Special Meeting is
duly requested in accordance with Section 23(c), for at least 10 Business Days
after the date of the Special Meeting or, if no Special Meeting is held within
90 Business Days following receipt of the Special Meeting Notice in accordance
with Section 23(c), for at least 10 Business Days following such 90 Business
Day period; provided, however, that such offer need not remain open, as a
result of this Section 1(j), beyond (A) the time until which any other offer
satisfying the criteria for a Qualified Offer is then required to be kept open
under this Section 1(j), or (B) the scheduled expiration date, as such date may
be extended by public announcement on or prior to the then scheduled expiration
date, of any other tender or exchange offer for Common Shares of the Company
with respect to which the Board of Directors has agreed to redeem the Rights
immediately prior to acceptance for payment of Common Shares thereunder (unless
such other offer is terminated prior to its expiration without any Common
Shares having been purchased thereunder);

(viii)        an offer pursuant to which the Company
has received an irrevocable written commitment by the offeror that, in addition
to the minimum time periods specified in item (vii) of this definition, the
offer, it if is otherwise to expire prior thereto, will be extended for at
least 20 Business Days after any increase in the price offered, and after any
bona fide alternative offer is commenced within the meaning of Rule 14d-2(a) of
the Exchange Act;

(ix)           an offer that is conditioned on a
minimum of at least 90% of the outstanding Common Shares (other than Common
Shares held by the offeror or its Affiliates and Associates) being tendered and
not withdrawn as of the offer’s expiration date, which condition shall not be
waivable;

 5
 

 

(x)            an offer pursuant to which the
Company has received an irrevocable written commitment by the offeror to
consummate as promptly as practicable upon successful completion of the offer a
second step transaction whereby all Common Shares not tendered into the offer
will be acquired at the same amount and form of consideration per share
actually paid pursuant to the offer, subject to shareholders’ statutory
appraisal rights, if any;

(xi)           an offer pursuant to which the
Company has received an irrevocable written commitment of the offeror that no
amendments will be made to the offer to reduce the offer consideration (other
than a reduction to reflect any dividend declared by the Company, other than a
regular quarterly dividend, after the commencement of such offer within the
meaning of Rule 14d-2(a) under the Exchange Act or any material change in the
capital structure of the Company initiated by the Company after the
commencement of such offer, whether by way of reclassification,
recapitalization, reorganization, repurchase or otherwise), change the form of
consideration offered, reduce the number of shares being sought, or otherwise
change the terms of the offer in a way that is adverse to a tendering
shareholder;

(xii)          if the offer includes Common Shares of
the offeror, (A) the offeror is a publicly owned United States corporation, and
its Common Shares are freely tradable and are listed or admitted to trading on
either the New York Stock Exchange or the Nasdaq National Market, (B) no
shareholder approval of the offeror is required to issue such Common Shares,
or, if required, such approval has already been obtained, (C) no Person
(including such Person’s Affiliates and Associates) beneficially owns more than
20% of the voting stock of the offeror at the time of commencement of the offer
within the meaning of Rule 14d-2(a) under the Exchange Act or at any time
during the term of the offer, and (D) no other class of voting stock of the
offeror is outstanding, and the offeror meets the registrant eligibility
requirements for use of Form S-3 for registering securities under the
Securities Act of 1933, as amended, including, without limitation, the filing
of all required Exchange Act reports in a timely manner during the 12 calendar
months prior to the date of commencement of the offer within the meaning of
Rule 14d-2(a) under the Exchange Act;

(xiii)         an offer pursuant to which the Company
has received an irrevocable written commitment of the offeror that the offeror
will pay (or share with any other offeror) at least one-half of the Company’s
costs of a Special Meeting requested in accordance with Section 23(c) with
respect to such offer, and

(xiv)        an offer pursuant to which the Company
has received an irrevocable written commitment of the offeror that, if the
offer is not consummated, neither the offeror nor any of its Affiliates or
Associates will make any offer for or purchase any equity securities of the
Company for a period of one year after the commencement within the meaning of
Rule 14d-2(a) under the Exchange Act of the original offer if such original
offer does not result in the tender of at least 85% of the outstanding Common
Shares not owned by such 

 6
 

 

offeror
(including its Affiliates and Associates), unless another tender offer by
another party for all outstanding Common Shares of the Company is commenced
that (A) constitutes a Qualified Offer (in which event, any new offer by such
offeror or of any of its Affiliates or Associates must be at a price no less
than that provided for in such original offer) or (B) is approved by the Board
of Directors of the Company (in which event, any new offer by such offeror or
of any of its Affiliates or Associates must be at a price no less than that
provided for in such approved offer).

For the purposes of the definition of Qualified Offer,
“fully financed” shall mean that the offeror has sufficient funds for the offer
which shall be evidenced by (A) definitive financing agreements executed
between the offeror and responsible financial institutions having the necessary
financial capacity to provide funds for such offer subject only to customary
terms and conditions (which shall in no event include conditions requiring
access by such financial institutions to non-public information to be provided
by the Company, conditions based on the accuracy of any information concerning
the Company, or conditions requiring the Company to make any representations,
warranties or covenants in connection with such financing), (B) cash or cash
equivalents then available to the offeror, set apart and maintained solely for
the purpose of funding the offer with an irrevocable written commitment being
provided by the offeror to the Company to maintain such availability until the
offer is consummated or withdrawn, or (C) a combination of the foregoing; which
evidence (including certified copies of any such definitive financing
agreements (including exhibits and related documents) and copies of all written
materials prepared by the offeror for such financial institutions in connection
with entering into such financing agreements) has been provided to the Company
prior to, or upon, commencement of the offer within the meaning of Rule
14d-2(a) under the Exchange Act; provided that “sufficient funds for the offer”
shall be an amount sufficient to pay for all Common Shares outstanding on a
fully diluted basis the cash portion of the consideration pursuant to the offer
and the second-step transaction required by clause (x) above and all related
expenses. If an offer becomes a Qualified Offer in accordance with this
definition but subsequently ceases to be a Qualified Offer as a result of the
failure at a later date to continue to satisfy any of the requirements of this
definition, such offer shall cease to be a Qualified Offer and the provisions
of Section 23(c) shall no longer be applicable to such offer, provided the
actual redemption of the Rights pursuant to Section 23(c) shall not have
already occurred.

(k)           “Redemption Date” shall have the
meaning set forth in Section 7 hereof.

(l)            “Shares Acquisition Date” shall mean
the first date of public announcement by the Company or an Acquiring Person
that an Acquiring Person has become such.

(m)          “Subsidiary” of any Person shall mean
any corporation or other entity of which a majority of the voting power of the
voting equity securities or equity interest is owned, directly or indirectly,
by such Person.

 7
 

 

Section 2.               Appointment
of Rights Agent.  The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of
the Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date also be the holders of the Common Shares of the Company) in
accordance with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment.  The Company
may from time to time appoint such co-Rights Agents as it may deem necessary or
desirable.

Section 3.               Issue of
Right Certificates.

(a)           Until
the earlier of (i) the tenth day after the Shares Acquisition Date or (ii) the
tenth Business Day (or such later date as may be determined by action of the
Company’s Board of Directors prior to such time as any Person becomes an
Acquiring Person) after the date of the commencement by any Person (other than
the Company, any Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company, any entity holding Common Shares
for or pursuant to the terms of any such plan or any trustee, administrator or
fiduciary of such a plan) of, or of the first public announcement of the
intention of any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or of any Subsidiary of the Company,
any entity holding Common Shares for or pursuant to the terms of any such plan,
or any trustee, administrator or fiduciary of such a plan) to commence, a
tender or exchange offer the consummation of which would result in any Person
becoming the Beneficial Owner of Common Shares of the Company aggregating 20%
or more of the then outstanding Common Shares (including any such date which is
after the date of this Agreement and prior to the issuance of the Rights; the
earlier of such dates being herein referred to as the “Distribution Date”), (x)
the Rights will be evidenced (subject to the provisions of Section 3(b) hereof)
by the certificates for Common Shares registered in the names of the holders
thereof (which certificates shall also be deemed to be Right Certificates) and
not by separate Right Certificates, and (y) the right to receive Right
Certificates will be transferable only in connection with the transfer of
Common Shares.  As soon as practicable
after the Distribution Date, the Company will prepare and execute, the Rights
Agent will countersign, and the Company will send or cause to be sent (and the
Rights Agent will, if requested, send) by first-class, insured, postage-prepaid
mail, to each record holder of Common Shares as of the close of business on the
Distribution Date, at the address of such holder shown on the records of the
Company, a Right Certificate, in substantially the form of Exhibit A hereto (a “Right
Certificate”), evidencing one Right for each Common Share so held.  As of the Distribution Date, the Rights will
be evidenced solely by such Right Certificates.

(b)           On
the Record Date, or as soon as practicable thereafter, the Company will send a
copy of a Summary of Rights to Purchase Common Shares, in substantially the
form of Exhibit B hereto (the “Summary of Rights”), by first-class,
postage-prepaid mail, to each record holder of Common Shares as of the close of
business on the Record Date, at the address of such holder shown on the records
of the Company.  With respect to
certificates for Common Shares outstanding as of the Record Date, until the
Distribution Date, the Rights will be evidenced by such certificates registered
in the names of the holders thereof. 
Until the Distribution Date (or the earlier of the Redemption Date or
the Final Expiration Date), the surrender for transfer of any certificate for
Common Shares outstanding on the Record Date, with or without a copy of the
Summary of Rights attached thereto, shall also constitute the transfer of the
Rights associated with the Common Shares represented thereby.

 8
 

 

(c)           Certificates
for Common Shares which become outstanding (including, without limitation,
certificates for reacquired Common Shares referred to in the last sentence of
this paragraph (c) and certificates issued on the transfer of Common Shares)
after the Record Date but prior to the earliest of the Distribution Date, the
Redemption Date or the Final Expiration Date shall have impressed on, printed
on, written on or otherwise affixed to them the following legend:

This certificate also evidences and entitles the
holder hereof to certain rights as set forth in a Rights Agreement between
Briggs & Stratton Corporation and National City Bank, dated as of August 7,
1996, and as such agreement may be amended (the “Rights Agreement”), the terms
of which are hereby incorporated herein by reference and a copy of which is on
file at the principal executive offices of Briggs & Stratton
Corporation.  Under certain
circumstances, as set forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be evidenced by this
certificate.  Briggs & Stratton
Corporation will mail to the holder of this certificate a copy of the Rights
Agreement without charge after receipt of a written request therefor.  As described in the Rights Agreement, Rights
issued to any Person who becomes an Acquiring Person (as defined in the Rights
Agreement) shall become null and void.

With respect to such certificates containing the
foregoing legend, until the Distribution Date, the Rights associated with the
Common Shares represented by such certificates shall be evidenced by such
certificates alone, and the surrender for transfer of any such certificate
shall also constitute the transfer of the Rights associated with the Common
Shares represented thereby.  In the event
that the Company purchases or acquires any Common Shares after the Record Date
but prior to the Distribution Date, any Rights associated with such Common
Shares shall be deemed cancelled and retired so that the Company shall not be
entitled to exercise any Rights associated with the Common Shares which are no
longer outstanding.

Section 4.               Form of Right Certificates.  The Right Certificates (and the forms of
election to purchase
Common Shares and of assignment to be printed on the reverse thereof) shall be
substantially the same as Exhibit A hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required with the
provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Rights may from time to
time be listed, or to conform to usage. 
Subject to the provisions of Section 22 hereof, the Right Certificates
shall entitle the holders thereof to purchase such number of Common Shares as
shall be set forth therein at the price per Common Share set forth therein (the
“Purchase Price”), but the amount and type of securities purchasable upon
exercise of each Right and the Purchase Price shall be subject to adjustment as
provided herein.

 9
 

 

Section 5.               Countersignature
and Registration.

(a)           The Right Certificates shall be
executed on behalf of the Company by its Chairman of the Board, its Chief
Executive Officer, its President, any of its Vice Presidents, or its Treasurer,
either manually or by facsimile signature, shall have affixed thereto the
Company’s seal or a facsimile thereof, and shall be attested by the Secretary
or an Assistant Secretary of the Company, either manually or by facsimile
signature.  The Right Certificates shall
be manually countersigned by the Rights Agent and shall not be valid for any
purpose unless countersigned.  In case
any officer of the Company who shall have signed any of the Right Certificates
shall cease to be such officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent and issued and delivered
by the Company with the same force and effect as though the person who signed
such Right Certificates had not ceased to be such officer of the Company; and
any Right Certificate may be signed on behalf of the Company by any person who,
at the actual date of the execution of such Right Certificate, shall be a
proper officer of the Company to sign such Right Certificate, although at the
date of the execution of this Rights Agreement any such person was not such an
officer.

(b)           Following the Distribution Date, the
Rights Agent will keep or cause to be kept, at its principal office, books for
registration and transfer of the Right Certificates issued hereunder.  Such books shall show the names and addresses
of the respective holders of the Right Certificates, the number of Rights
evidenced on its face by each of the Right Certificates and the date of each of
the Right Certificates.

Section 6.               Transfer, Split Up, Combination
and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen
Right Certificates.

(a)           Subject to the provisions of Section
14 hereof, at any time after the close of business on the Distribution Date,
and at or prior to the close of business on the earlier of the Redemption Date
or the Final Expiration Date, any Right Certificate or Right Certificates
(other than Right Certificates representing Rights that have become void
pursuant to Section 11(a)(ii) hereof or that have been exchanged pursuant to
Section 24 hereof) may be transferred, split up, combined or exchanged for
another Right Certificate or Right Certificates, entitling the registered
holder to purchase a like number of Common Shares as the Right Certificate or
Right Certificates surrendered then entitled such holder to purchase.  Any registered holder desiring to transfer,
split up, combine or exchange any Right Certificate or Right Certificates shall
make such request in writing delivered to the Rights Agent, and shall surrender
the Right Certificate or Right Certificates to be transferred, split up,
combined or exchanged at the principal office of the Rights Agent.  Thereupon the Rights Agent shall countersign
and deliver to the person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested.  The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right
Certificates.

 10

 

(b)           Upon receipt by the Company and the
Rights Agent of evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Right Certificate, and, in case of loss, theft
or destruction, of indemnity or security reasonably satisfactory to them, and,
at the Company’s request, reimbursement to the Company and the Rights Agent of
all reasonable expenses incidental thereto, and upon surrender to the Rights
Agent and cancellation of the Right Certificate if mutilated, the Company will
make and deliver a new Right Certificate of like tenor to the Rights Agent for
delivery to the registered holder in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.

Section 7.               Exercise of Rights; Purchase
Price; Expiration Date of Rights.

(a)           The registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the Distribution Date
upon surrender of the Right Certificate, with the form of election to purchase
on the reverse side thereof duly executed, to the Rights Agent at the principal
office of the Rights Agent, together with payment of the Purchase Price for
each Common Share as to which the Rights are exercised, at or prior to the
earliest of (i) the close of business on October 18, 2009 (the “Final
Expiration Date”), (ii) the time at which the Rights are redeemed as provided
in Section 23 hereof (the “Redemption Date”), or (iii) the time at which such
Rights are exchanged as provided in Section 24 hereof.

(b)           The Purchase Price for each Common
Share purchasable pursuant to the exercise of a Right shall initially be $160,
shall be subject to adjustment from time to time as provided in Sections 11 and
13 hereof (including an adjustment of such price to $80 as a result of the
two-for-one stock split of the Common Shares effected as a 100% stock dividend
effective October 29, 2004) and shall be payable in lawful money of the United
States of America in accordance with paragraph (c) below.

(c)           Upon receipt of a Right Certificate
representing exercisable Rights, with the form of election to purchase duly
executed, accompanied by payment of the Purchase Price for the shares to be
purchased and an amount equal to any applicable transfer tax required to be
paid by the holder of such Right Certificate in accordance with Section 9
hereof, as set forth below, the Rights Agent shall thereupon promptly (i)
requisition from any transfer agent of the Common Shares certificates for the
number of Common Shares to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, (ii) when
appropriate, requisition from the Company the amount of cash to be paid in lieu
of issuance of fractional shares in accordance with Section 14 hereof, (iii)
after receipt of such certificates, cause the same to be delivered to or upon
the order of the registered holder of such Right Certificate, registered in
such name or names as may be designated by such holder and (iv) when appropriate,
after receipt, deliver such cash to or upon the order of the registered holder
of such Right Certificate.  The payment
of the Purchase Price (as such amount may be reduced pursuant to Section
11(a)(iii) hereof) shall be made in cash or by certified check, cashier’s
check, bank draft or money order payable to the order of the Company, except
that, if so provided by the Board of Directors of the Company, the payment of
the Purchase Price following the occurrence of a Section 11(a)(ii) Event (as
hereinafter defined) and until 

 11
 

 

the first
occurrence of an event described in clauses (a), (b) or (c) of Section 13 may
be made wholly or in part by delivery of a certificate or certificates (with
appropriate stock powers executed in blank attached thereto) evidencing a
number of Common Shares of the Company equal to the then Purchase Price divided
by the closing price (as determined pursuant to Section 11(d) hereof) per
Common Share on the Trading Day (as such term is hereinafter defined)
immediately preceding the date of such exercise. If the Company is obligated to
issue other securities of the Company, pay cash and/or distribute other
property pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such other securities, cash and/or other
property are available for distribution by the Rights Agent, if and when
appropriate.

(d)           In case the registered holder of any
Right Certificate shall exercise less than all the Rights evidenced thereby, a
new Right Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent to the registered holder of
such Right Certificate or to his duly authorized assigns, subject to the
provisions of Section 14 hereof.

(e)           Notwithstanding anything in this Agreement
to the contrary, neither the Rights Agent nor the Company shall be obligated to
take any action with respect to a registered holder of a Right Certificate upon
the occurrence of any purported transfer, assignment or exercise as set forth
in this Section 7 unless such registered holder shall have (i) completed and
signed the certificate following the form of assignment or election to purchase
set forth on the reverse of the Right Certificate surrendered for such
transfer, assignment or exercise, and (ii) provided such additional evidence of
the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates
or Associates thereof as the Company shall reasonably request.

(f)            Prior to the time and date that an
Acquiring Person becomes such, nothing in this Agreement will prevent the
Company from issuing previously authorized and unissued Common Shares for any
purpose or purposes approved by the Company’s Board of Directors, subject to
any applicable law and any rules or regulations of any stock exchange on which
the Common Shares are then listed.

Section 8.               Cancellation and Destruction of
Right Certificates.  All Right
Certificates surrendered for
the purpose of exercise, transfer, split up, combination or exchange shall, if
surrendered to the Company or to any of its agents, be delivered to the Rights
Agent for cancellation or in cancelled form, or, if surrendered to the Rights
Agent, shall be cancelled by it, and no Right Certificates shall be issued in
lieu thereof except as expressly permitted by any of the provisions of this
Rights Agreement.  The Company shall
deliver to the Rights Agent for cancellation and retirement, and the Rights
Agent shall so cancel and retire, any other Right Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof.  The Rights Agent shall deliver all cancelled
Right Certificates to the Company, or shall, at the written request of the
Company, destroy such cancelled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.

 12
 

 

Section 9.               Reservation
and Availability of Common Shares.

(a)           The Company covenants and agrees that
it will cause to be reserved and kept available out of its authorized and
unissued Common Shares or any authorized and issued Common Shares held in its
treasury, the number of Common Shares that will be sufficient to permit the
exercise in full of all outstanding Rights in accordance with Section 7.

(b)           So long as the Common Shares issuable
upon the exercise of Rights may be listed on any national securities exchange,
the Company shall use its best efforts to cause, from and after such time as
the Rights become exercisable, all Common Shares reserved for such issuance to
be listed on such exchange upon official notice of issuance upon such exercise.

(c)           The Company covenants and agrees that
it will take all such action as may be necessary to ensure that all Common
Shares delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such Common Shares (subject to payment of the Purchase Price),
be duly and validly authorized and issued and fully paid and nonassessable
shares (except as otherwise provided by any corporation law applicable to the
Company).

(d)           The Company further covenants and
agrees that it will pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of the issuance or
delivery of the Right Certificates or of any Common Shares upon the exercise of
Rights.  The Company shall not, however,
be required to pay any transfer tax which may be payable in respect of any
transfer or delivery of Right Certificates to a person other than, or the
issuance or delivery of certificates for the Common Shares in a name other than
that of, the registered holder of the Right Certificate evidencing Rights
surrendered for exercise or to issue or to deliver any certificates for Common
Shares upon the exercise of any Rights until any such tax shall have been paid
(any such tax being payable by the holder of such Right Certificate at the time
of surrender) or until it has been established to the Company’s reasonable
satisfaction that no such tax is due.

Section 10.             Common Shares Record Date.  Each person in whose name any certificate for
Common Shares is issued
upon the exercise of Rights shall for all purposes be deemed to have become the
holder of record of the Common Shares represented thereby on, and such
certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Common Shares
transfer books of the Company are closed, such person shall be deemed to have
become the record holder of such shares on, and such certificate shall be
dated, the next succeeding Business Day on which the Common Shares transfer
books of the Company are open.  Prior to
the exercise of the Rights evidenced thereby, the holder of a Right Certificate
shall not be entitled to any rights of a holder of Common Shares for which the
Rights shall be exercisable, including, without limitation, the right to vote,
to receive dividends or other 

 13
 

 

distributions or to
exercise any preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.

Section 11.             Adjustment of Purchase Price,
Number of Shares or Number of Rights. 
The Purchase
Price, the number of Common Shares covered by each Right and the number of
Rights outstanding are subject to adjustment from time to time as provided in
this Section 11.

(a)           (i)            In
the event the Company shall at any time after the date of this Agreement (A)
declare a dividend on the Common Shares payable in Common Shares, (B) subdivide
the outstanding Common Shares, (C) combine the outstanding Common Shares into a
smaller number of Common Shares, or (D) issue any shares of its capital stock
in a reclassification of the Common Shares (including any such reclassification
in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation), except as otherwise provided in this
Section 11(a), the Purchase Price in effect at the time of the record date for
such dividend or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of capital stock issuable
on such date, shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive the aggregate number and
kind of shares of capital stock which, if such Right had been exercised
immediately prior to such date and at a time when the Common Shares transfer
books of the Company were open, such holder would have owned upon such exercise
and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable upon
exercise of one Right.  If an event
occurs which would require an adjustment under both Section 11(a)(i) and
Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall
be in addition to, and shall be made prior to, any adjustment required pursuant
to Section 11(a)(ii).

(ii)           Subject to Section 24 of this
Agreement, in the event that any Person shall become an Acquiring Person, each
holder of a Right shall thereafter have a right to receive, upon exercise
thereof at a price equal to two times the then current Purchase Price
multiplied by the number of Common Shares for which a Right is then
exercisable, in accordance with the terms of this Agreement, such number of
Common Shares of the Company as shall equal the result obtained by (x)
multiplying two times the then current Purchase Price by the number of Common
Shares for which a Right is then exercisable and dividing that product by (y)
50% of the then current per share market price of the Company’s Common Shares
(determined pursuant to Section 11(d) hereof) on the date of the occurrence of
such event (such number of shares, the “Adjustment Shares”).  In the event that any Person shall become an
Acquiring Person and the Rights shall then be outstanding, the Company shall
not, except as permitted by Section 24 or Section 27, take any action which
would eliminate or diminish the benefits intended to be afforded by the Rights.

 14
 

 

From
and after such time as a Person becomes an Acquiring Person (a “Section
11(a)(ii) Event”), any Rights that are or were acquired or beneficially owned
by any Acquiring Person (or any Associate or Affiliate of such Acquiring
Person) shall be void and any holder of such Rights shall thereafter have no
right to exercise such Rights under any provision of this Agreement.  No Right Certificate shall be issued pursuant
to Section 3 that represents Rights beneficially owned by an Acquiring Person
whose Rights would be void pursuant to the preceding sentence or any Associate
or Affiliate thereof; no Right Certificate shall be issued at any time upon the
transfer of any Rights to an Acquiring Person whose Rights would be void
pursuant to the preceding sentence or any Associate or Affiliate thereof or to
any nominee of such Acquiring Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for transfer to an Acquiring Person
whose Rights would be void pursuant to the preceding sentence shall be
cancelled.  The Company shall use all
reasonable efforts to ensure that the provisions of this paragraph are complied
with, but shall have no liability to any holder of Right Certificates or other
Person as a result of its failure to make any determinations with respect to an
Acquiring Person or its Affiliates, Associates or transferees hereunder.

(iii)          In the event that there shall not be
sufficient Common Shares of the Company issued but not outstanding or
authorized but unissued (and not reserved for issuance for purposes other than
upon exercise of the Rights) to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii), the Company shall:  (A) determine the excess of (1) the value of
the Adjustment Shares issuable upon the exercise of a Right (the “Current Value”)
over (2) the Purchase Price (such excess, the “Spread”), and (B) with respect
to each Right, make adequate provision to substitute for the Adjustment Shares,
upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the
Purchase Price, (3) equity securities of the Company (including, without
limitation, shares, or units of shares, of preferred stock which the Board of
Directors of the Company has deemed to have the same value as Common Shares
(such shares of preferred stock, hereinafter referred to as “common stock
equivalents”)), (4) debt securities of the Company, (5) other assets or (6) any
combination of the foregoing, having an aggregate value equal to the Current
Value, where such aggregate value has been determined by the Board of Directors
of the Company based upon the advice of a nationally recognized investment
banking firm selected by the Board of Directors of the Company; provided,
however, if the Company shall not have made adequate provision to substitute for
the Adjustment Shares pursuant to clause (B) above within thirty (30) days
following the occurrence of a Section 11(a)(ii) Event (the “Section 11(a)(ii)
Trigger Date”), then the Company shall be obligated to deliver, upon the
surrender for exercise of a Right and without requiring payment of the Purchase
Price, Common Shares (to the extent available) and then, if necessary, cash,
which shares and/or cash have an aggregate value equal to the Spread. If the
Board of Directors of the Company shall determine in good faith that it is
likely that sufficient additional Common Shares might be authorized for
issuance upon exercise in full of the Rights, the thirty (30) day period set
forth above may be 

 15
 

 

extended to
the extent necessary, but not more than ninety (90) days after the Section
11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval
for the authorization of such additional shares (such period, as it may be
extended, the “Substitution Period”). To the extent that the Company determines
that some action need be taken pursuant to the first and/or second sentences of
this Section 11(a)(iii), the Company (x) shall provide, subject to the last
paragraph of Section 11(a)(ii) hereof, that such action shall apply uniformly
to all outstanding Rights, and (y) may suspend the exercisability of the Rights
until the expiration of the Substitution Period to seek any authorization of
additional shares and/or to decide the appropriate form of distribution to be
made pursuant to such first sentence and to determine the value thereof. In the
event of any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended,
as well as a public announcement at such time as the suspension is no longer in
effect. For purposes of this Section 11(a)(iii), the value of the Common Shares
shall be the current per share market price (as determined pursuant to Section
11(d) hereof) of the Common Shares on the Section 11(a)(ii) Trigger Date and
the value of any “common stock equivalent” shall be deemed to have the same
value as the Common Shares on such date.

(b)           In case the Company shall fix a
record date for the issuance of rights, options or warrants to all holders of
Common Shares entitling them (for a period expiring within 45 calendar days
after such record date) to subscribe for or purchase Common Shares or
securities convertible into Common Shares at a price per Common Share (or
having a conversion price per share, if a security convertible into Common
Shares) less than the then current per share market price of the Common Shares
(as defined in Section 11(d)) on such record date, the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of Common Shares outstanding on such
record date plus the number of Common Shares which the aggregate offering price
of the total number of Common Shares so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be offered) would
purchase at such current market price and the denominator of which shall be the
number of Common Shares outstanding on such record date plus the number of
additional Common Shares to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible);
provided, however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one Right.  In case such subscription price may be paid
in a consideration part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board
of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent. 
Common Shares owned by or held for the account of the Company shall not
be deemed outstanding for the purpose of any such computation.  Such adjustment shall be made successively
whenever such a record date is fixed; and in the event that such rights,
options or warrants are not so issued, the Purchase Price shall be adjusted to
be the Purchase Price which would then be in effect if such record date had not
been fixed.

 16
 

 

(c)           In case the Company shall fix a
record date for the making of a distribution to all holders of the Common
Shares (including any such distribution made in connection with a consolidation
or merger in which the Company is the continuing or surviving corporation) of
evidences of indebtedness or assets (other than a regular quarterly cash
dividend or a dividend payable in Common Shares) or subscription rights or
warrants (excluding those referred to in Section 11(b) hereof), the Purchase
Price to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the then current per share market price of the
Common Shares (as defined in Section 11(d)) on such record date, less the fair
market value (as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent) of the portion of the assets or evidences of indebtedness so to
be distributed or of such subscription rights or warrants applicable to one
Common Share and the denominator of which shall be such current per share
market price of the Common Shares; provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company to be issued
upon exercise of one Right.  Such
adjustments shall be made successively whenever such a record date is fixed;
and in the event that such distribution is not so made, the Purchase price
shall again be adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.

(d)           For the purpose of any computation
hereunder, the “current per share market price” of the Common Shares or any
other security (a Common Share or other security, a “Security” for the purpose
of this Section 11(d)) on any date shall be deemed to be the average of the
daily closing prices per share of such Security for the 30 consecutive Trading
Days (as such term is hereinafter defined) immediately prior to such date;
provided, however, that in the event that the current per share market price of
the Security is determined during a period following the announcement by the
issuer of such Security of (A) a dividend or distribution on such Security
payable in shares of such Security or securities convertible into such shares,
or (B) any subdivision, combination or reclassification of such Security and
prior to the expiration of 30 Trading Days after the ex-dividend date for such
dividend or distribution, or the record date for such subdivision, combination
or reclassification, then, and in each such case, the current per share market
price shall be appropriately adjusted to reflect the current market price per
share equivalent of such Security.  The
closing price for each Trading Day shall be the last sale price, regular way,
or, in case no such sale takes place on such day, the average of the closing
bid and asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Securities are
not listed or admitted to trading on the New York Stock Exchange, as reported
in the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
Security is listed or admitted to trading or, if the Security is not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotations System (“Nasdaq”) or such other system then
in use, or, if on 

 17
 

 

any such date
the Security is not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a
market in the Security selected by the Board of Directors of the Company. The
term “Trading Day” shall mean a day on which the principal national securities
exchange on which the Security is listed or admitted to trading is open for the
transaction of business or, if the Security is not listed or admitted to
trading on any national securities exchange, a Business Day.  If the Security is not publicly held or so
listed or traded, then “current per share market price” shall mean the fair
value per share as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent.

(e)           No adjustment in the Purchase Price
shall be required unless such adjustment would require an increase or decrease
of at least 1% in the Purchase Price; provided, however, that any adjustments
which by reason of this Section 11(e) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment.  All calculations under this Section 11 shall
be made to the nearest cent or to the nearest one ten-thousandth of a share as
the case may be.  Notwithstanding the
first sentence of this Section 11(e), any adjustment required by this Section
11 shall be made no later than the earlier of (i) three years from the date of
the transaction which requires such adjustment or (ii) the date of the
expiration of the right to exercise any Rights.

(f)            If as a result of an adjustment made
pursuant to Section 11(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock of the Company
other than Common Shares, thereafter the number of such other shares so
receivable upon exercise of any Right shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Common Shares contained in Section 11(a) through
(c), inclusive, and the provisions of Sections 7, 9, 10 and 13 with respect to
the Common Shares shall apply on like terms to any such other shares.

(g)           All Rights originally issued by the
Company subsequent to any adjustment made to the Purchase Price hereunder shall
evidence the right to purchase, at the adjusted Purchase Price, the number of
Common Shares purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.

(h)           Unless the Company shall have
exercised its election as provided in Section 11(i), upon each adjustment of
the Purchase Price as a result of the calculations made in Sections 11(b) and
(c), each Right outstanding immediately prior to the making of such adjustment
shall thereafter evidence the right to purchase, at the adjusted Purchase
Price, that number of Common Shares (calculated to the nearest one
ten-thousandth of a share) obtained by (i) multiplying (x) the number of shares
covered by a Right immediately prior to this adjustment by (y) the Purchase
Price in effect immediately prior to such adjustment of the Purchase Price and
(ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.

 18

 

(i)            The Company may elect on or after
the date of any adjustment of the Purchase Price to adjust the number of
Rights, in substitution for any adjustment in the number of Common Shares
purchasable upon the exercise of a Right. 
Each of the Rights outstanding after such adjustment of the number of
Rights shall be exercisable for the number of Common Shares for which a Right
was exercisable immediately prior to such adjustment.  Each Right held of record prior to such adjustment
of the number of Rights shall become that number of Rights (calculated to the
nearest one ten-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase Price in
effect immediately after adjustment of the Purchase Price.  The Company shall make a public announcement
of its election to adjust the number of Rights, indicating the record date for
the adjustment, and, if known at the time, the amount of the adjustment to be
made.  This record date may be the date
on which the Purchase Price is adjusted or any day thereafter, but, if the
Right Certificates have been issued, shall be at least 10 days later than the
date of the public announcement.  If
Right Certificates have been issued, upon each adjustment of the number of
Rights pursuant to this Section 11(i), the Company shall, as promptly as
practicable, cause to be distributed to holders of record of Right Certificates
on such record date Right Certificates evidencing, subject to Section 14
hereof, the additional Rights to which such holders shall be entitled as a
result of such adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment.  Right Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein and shall be registered in the names of the holders of record of
Right Certificates on the record date specified in the public announcement.

(j)            Irrespective of any adjustment or
change in the Purchase Price or the number of Common Shares issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number of Common
Shares which were expressed in the initial Right Certificates issued hereunder.

(k)           Before taking any action that would
cause an adjustment reducing the Purchase Price below the then par value, if
any, of the Common Shares issuable upon exercise of the Rights, the Company
shall take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid
and nonassessable (except as otherwise provided by any corporation law
applicable to the Company) Common Shares at such adjusted Purchase Price.

(l)            In any case in which this Section 11
shall require that an adjustment in the Purchase Price be made effective as of
a record date for a specified event, the Company may elect to defer until the
occurrence of such event the issuing to the holder of any Right exercised after
such record date of the Common Shares and other capital stock or securities of
the Company, if any, issuable upon such exercise over and above the Common
Shares and other capital stock or securities of the Company, if any, issuable
upon such exercise on the basis of the Purchase Price in effect prior to such
adjustment; 

 19
 

 

provided,
however, that the Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder’s right to receive such additional
shares upon the occurrence of the event requiring such adjustment.

(m)          Anything in this Section 11 to the
contrary notwithstanding, the Company shall be entitled to make such reductions
in the Purchase Price, in addition to those adjustments expressly required by
this Section 11, as and to the extent that it in its sole discretion shall
determine to be advisable in order that any consolidation or subdivision of the
Common Shares, issuance wholly for cash of any Common Shares at less than the
current market price, issuance wholly for cash of Common Shares or securities
which by their terms are convertible into or exchangeable for Common Shares,
dividends on Common Shares payable in Common Shares or issuance of rights,
options or warrants referred to hereinabove in Section 11(b), hereafter made by
the Company to holders of its Common Shares shall not be taxable to such
stockholders.

(n)           The Company covenants and agrees that
it shall not, at any time after the earlier of the Distribution Date or the
Shares Acquisition Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction which complies with the second
sentence of Section 11(a)(ii) hereof), (ii) merge with or into any other Person
(other than a Subsidiary of the Company in a transaction which complies with
the second sentence of Section 11(a)(ii) hereof), (iii) sell or transfer (or
permit any Subsidiary to sell or transfer), in one transaction, or a series of
related transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to any other Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which complies with the second
sentence of Section 11(a)(ii) hereof) or (iv) consummate a share exchange with
any other Person, if at the time of or immediately after such consolidation,
merger, sale or share exchange (A) there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights, (B) prior to, simultaneously with or immediately after
such consolidation, merger, sale or share exchange the stockholders of the
Person who constitute, or would constitute, the issuer of Common Shares for
purposes of Section 13 hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and Associates or (C) the
form or nature of organization of the Principal Party would preclude or limit
the exercisability of the Rights.

Section 12.             Certificate of Adjusted Purchase
Price or Number of Shares.  Whenever an
adjustment is made as
provided in Sections 11 or 13 hereof, the Company shall promptly (a) prepare a
certificate setting forth such adjustment, and a brief statement of the facts
accounting for such adjustment, (b) file with the Rights Agent and with each
transfer agent for the Common Shares a copy of such certificate and (c) mail a
brief summary thereof to each holder of a Right Certificate in accordance with
Section 25 hereof.

 20
 

 

Section 13.             Consolidation, Merger, Share
Exchange or Sale or Transfer of Assets or Earning Power.  In the event, directly or indirectly, at any
time after a person has become an Acquiring Person, (a) the Company shall
consolidate with, or merge with and into, any other Person, (b) any Person
shall consolidate with the Company, or merge with and into the Company and the
Company shall be the continuing or surviving corporation of such merger, or any
Person or Persons shall consummate a share exchange with the Company, and, in
connection with such merger or share exchange, all or part of the Common Shares
shall be changed into or exchanged for stock or other securities of any other
Person (or the Company) or cash or any other property, or (c) the Company shall
sell or otherwise transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer), in one or more transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person other than the Company or
one or more of its wholly-owned Subsidiaries, then, and in each such case,
proper provision shall be made so that (i) each holder of a Right (except as
otherwise provided herein) shall thereafter have the right to receive, upon the
exercise thereof at a price equal to two times the then current Purchase Price
multiplied by the number of Common Shares for which a Right is then
exercisable, in accordance with the terms of this Agreement, such number of
Common Shares of such other Person (including the Company as successor thereto
or as the surviving corporation) as shall equal the result obtained by (A)
multiplying two times the then current Purchase Price by the number of Common
Shares for which a Right is then exercisable and dividing that product by (B)
50% of the then current per share market price of the Common Shares of such
other Person (determined pursuant to Section 11(d) hereof) on the date of
consummation of such consolidation, merger, share exchange, sale or transfer;
(ii) the issuer of such Common Shares shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, sale or transfer, all the
obligations and duties of the Company pursuant to this Agreement; (iii) the
term “Company” shall thereafter be deemed to refer to such issuer; and (iv)
such issuer shall take such steps (including, but not limited to, the
reservation of a sufficient number of its Common Shares in accordance with
Section 9 hereof) in connection with such consummation as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to the Common Shares thereafter deliverable upon
the exercise of the Rights.  The Company
shall not consummate any such consolidation, merger, share exchange, sale or
transfer unless prior thereto the Company and such issuer shall have executed
and delivered to the Rights Agent a supplemental agreement so providing.  The Company shall not enter into any
transaction of the kind referred to in this Section 13 if at the time of such
transaction there are any rights, warrants, instruments or securities
outstanding or any agreements or arrangements which, as a result of the
consummation of such transaction, would eliminate or substantially diminish the
benefits intended to be afforded by the Rights. 
The provisions of this Section 13 shall similarly apply to successive
mergers, consolidations, share exchanges or sales or other transfers.

 21
 

 

Section 14.             Fractional Rights and Fractional
Shares.

(a)           The Company shall not be required to
issue fractions of Rights or to distribute Right Certificates which evidence
fractional Rights.  In lieu of such
fractional Rights, there shall be paid to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right.  For the purposes
of this Section 14(a), the current market value of a whole Right shall be the
closing price of the Rights for the Trading Day immediately prior to the date on
which such fractional Rights would have been otherwise issuable.  The closing price for any day shall be the
last sale price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the Rights are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Rights are listed or admitted to trading or,
if the Rights are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by Nasdaq
or such other system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the
Rights selected by the Board of Directors of the Company.  If on any such date no such market maker is
making a market in the Rights, the fair value of the Rights on such date as
determined in good faith by the Board of Directors of the Company shall be
used.

(b)           The Company shall not be required to
issue fractions of Common Shares upon exercise of the Rights or to distribute
certificates which evidence fractional Common Shares.  In lieu of fractional Common Shares, the
Company may, at its sole option, pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of one Common
Share.  For the purposes of this Section
14(b), the current market value of a Common Share shall be the closing price of
a Common Share (as determined pursuant to the second sentence of Section 11(d)(i)
hereof) for the Trading Day immediately prior to the date of such exercise.

(c)           The holder of a Right by the
acceptance of the Right expressly waives his right to receive any fractional
Rights or any fractional shares upon exercise of a Right (except as provided
above).

Section 15.             Rights of Action.  All rights of action in respect of this
Agreement, excepting the rights of action given to the
Rights Agent under Section 18 hereof, are vested in the respective registered
holders of the Right Certificates (and, prior to the Distribution Date, the
registered holders of the Common Shares); and any registered holder of any
Right Certificate (or, prior to the Distribution Date, of the Common Shares),
without the consent of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of the Common Shares), may, in
his own behalf and for his own benefit, enforce, and may institute and maintain
any suit, action or proceeding against the Company to enforce, or otherwise act
in respect of, his right to exercise the Rights evidenced by such Right
Certificate in the manner provided in such Right Certificate and in this
Agreement.  Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at
law for any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of the obligations of any Person subject to, this
Agreement.

 22
 

 

Section 16.             Agreement of Right Holders.  Every holder of a Right, by accepting the
same, consents and
agrees with the Company and the Rights Agent and with every other holder of a
Right that:

(a)           prior to the Distribution Date, the
Rights will be transferable only in connection with the transfer of the Common
Shares;

(b)           after the Distribution Date, the
Right Certificates are transferable only on the registry books of the Rights
Agent if surrendered at the principal office of the Rights Agent, duly endorsed
or accompanied by a proper instrument of transfer; and

(c)           the Company and the Rights Agent may
deem and treat the person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Shares certificate) is registered as
the absolute owner thereof and of the Rights evidenced thereby (notwithstanding
any notations of ownership or writing on the Right Certificates or the
associated Common Shares certificate made by anyone other than the Company or
the Rights Agent) for all purposes whatsoever, and neither the Company nor the
Rights Agent shall be affected by any notice to the contrary.

Section 17.             Right Certificate Holder Not Deemed
a Shareholder.  No holder, as such, of any
Right Certificate shall
be entitled to vote, receive dividends or be deemed for any purpose the holder
of the Common Shares or any other securities of the Company which may at any
time be issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be construed to confer
upon the holder of any Right Certificate, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting thereof, or to give
or withhold consent to any corporate action, or to receive notice of meetings
or other actions affecting stockholders (except as provided in Section 25
hereof), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by such Right Certificate shall have been
exercised in accordance with the provisions hereof.

Section 18.             Concerning the Rights Agent.

(a)           The Company agrees to pay to the
Rights Agent reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its reasonable expenses
and counsel fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder.  The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any loss,
liability or expense, incurred without negligence, bad faith or willful misconduct
on the part of the Rights Agent, for anything done or omitted by the Rights
Agent in connection with the acceptance and administration of this Agreement,
including the costs and expenses of defending against any claim of liability in
the premises.

(b)           The Rights Agent shall be protected
and shall incur no liability for, or in respect of any action taken, suffered
or omitted by it in connection with, its administration of this Agreement in
reliance upon any Right Certificate or certificate for the Common Shares or for
other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be 

 23
 

 

signed,
executed and, where necessary, verified or acknowledged, by the proper person
or persons, or otherwise upon the advice of counsel as set forth in Section 20
hereof.

Section 19.             Merger or Consolidation or Change
of Name of Rights Agent.

(a)           Any corporation into which the Rights
Agent or any successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which the Rights Agent or any successor Rights Agent shall be a party, or any
corporation succeeding to the stock transfer or corporate trust business of the
Rights Agent or any successor Rights Agent, shall be the successor to the
Rights Agent under this Agreement without the execution or filing of any paper
or any further act on the part of any of the parties hereto; provided, that
such corporation would be eligible for appointment as a successor Rights Agent
under the provisions of Section 21 hereof. 
In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.

(b)           In case at any time the name of the
Rights Agent shall be changed and at such time any of the Right Certificates
shall have been countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall not
have been countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name; and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.

Section 20.             Duties of Rights Agent.  The Rights Agent undertakes the duties and
obligations imposed by
this Agreement upon the following terms and conditions, by all of which the
Company and the holders of Right Certificates, by their acceptance thereof,
shall be bound:

(a)           The Rights Agent may consult with
legal counsel (who may be legal counsel for the Company), and the opinion of
such counsel shall be full and complete authorization and protection to the
Rights Agent as to any action taken or omitted by it in good faith and in
accordance with such opinion.

(b)           Whenever in the performance of its
duties under this Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter be proved or established by the Company prior
to taking or suffering any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be deemed to
be conclusively proved and established by a certificate signed by any one 

 24
 

 

of the
Chairman of the Board, the Chief Executive Officer, the President, any Vice
President, the Treasurer or the Secretary of the Company and delivered to the
Rights Agent; and such certificate shall be full authorization to the Rights
Agent for any action taken or suffered in good faith by it under the provisions
of this Agreement in reliance upon such certificate.

(c)           The Rights Agent shall be liable
hereunder to the Company and any other Person only for its own negligence, bad
faith or willful misconduct.

(d)           The Rights Agent shall not be liable
for or by reason of any of the statements of fact or recitals contained in this
Agreement or in the Right Certificates (except its countersignature thereof) or
be required to verify the same, but all such statements and recitals are and
shall be deemed to have been made by the Company only.

(e)           The Rights Agent shall not be under
any responsibility in respect of the validity of this Agreement or the
execution and delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution of any Right Certificate (except
its countersignature thereof); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this Agreement or in any
Right Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void pursuant to
Section 11(a)(ii) hereof) or any adjustment in the terms of the Rights
(including the manner, method or amount thereof) provided for in Section 3, 11,
13, 23 or 24, or the ascertaining of the existence of facts that would require
any such change or adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after actual notice that such change or
adjustment is required); nor shall it by any act hereunder be deemed to make
any representation or warranty as to the authorization or reservation of any
Common Shares to be issued pursuant to this Agreement or any Right Certificate
or as to whether any Common Shares will, when issued, be validly authorized and
issued, fully paid and nonassessable.

(f)            The Company agrees that it will
perform, execute, acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts, instruments and
assurances as may reasonably be required by the Rights Agent for the carrying
out or performing by the Rights Agent of the provisions of this Agreement.

(g)           The Rights Agent is hereby authorized
and directed to accept instructions with respect to the performance of its
duties hereunder from any one of the Chairman of the Board, the Chief Executive
Officer, the President, any Vice President, the Secretary or the Treasurer of
the Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action taken or
suffered by it in good faith in accordance with instructions of any such
officer or for any delay in acting while waiting for those instructions.

(h)           The Rights Agent and any stockholder,
director, officer or employee of the Rights Agent may buy, sell or deal in, or
act as the transfer agent for, any of the Rights, Common Shares or other
securities of the Company or become pecuniarily interested in 

 25
 

 

any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. 
Nothing herein shall preclude the Rights Agent from acting in any other
capacity for the Company or for any other legal entity.

(i)             The Rights Agent may execute and
exercise any of the rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or agents, and the
Rights Agent shall not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or agents or for any loss to the
Company resulting from any such act, default, neglect or misconduct, provided
reasonable care was exercised in the selection and continued employment
thereof.

Section 21.             Change of Rights Agent.  The Rights Agent or any successor Rights
Agent may resign and be
discharged from its duties under this Agreement upon 30 days’ notice in writing
mailed to the Company and to each transfer agent of the Common Shares by
registered or certified mail and, if separate Right Certificates have been
issued as of the date of such notice as contemplated by Section 3 hereof, to
the holders of the Right Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon 30 days’ notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Common Shares by registered or certified
mail, and, if separate Right Certificates have been issued as of the date of
such notice as contemplated by Section 3 hereof, to the holders of the Right
Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right Certificate
(who shall, with such notice, submit his Right Certificate for inspection by
the Company), then the registered holder of any Right Certificate may apply to
any court of competent jurisdiction for the appointment of a new Rights Agent.
Any successor Rights Agent, whether appointed by the Company or by such a
court, shall be (a) a corporation organized and doing business under the laws
of the United States or under the laws of any state of the United States so
long as such corporation is authorized to do business in the State of New York
or the State of Wisconsin, in good standing, which is authorized under such
laws to exercise corporate trust or stock transfer powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50 million, or (b) an Affiliate of a corporation described in clause (a)
of this sentence. After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment the Company shall file
notice thereof in writing with the predecessor Rights Agent and each transfer
agent of the Common Shares, and, if separate Right Certificates have been
issued as of such effective date as contemplated by Section 3 hereof, mail a
notice thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall 

 26
 

 

not affect the legality
or validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.

Section 22.             Issuance of New Right
Certificates.  Notwithstanding any of the
provisions of this
Agreement or of the Rights to the contrary, the Company may, at its option,
issue new Right Certificates evidencing Rights in such form as may be approved
by its Board of Directors to reflect any adjustment or change in the Purchase
Price and the number or kind or class of shares or other securities or property
purchasable under the Right Certificates made in accordance with the provisions
of this Agreement.

Section 23.             Redemption.

(a)           The Rights may be redeemed by action
of the Board of Directors pursuant to paragraph (b) of this Section 23 or by
shareholder action pursuant to subparagraph (c) of this Section 23 and shall
not be redeemed in any other manner.

(b)           The Board of Directors of the Company
may, at its option, at any time prior to such time as any Person becomes an
Acquiring Person, redeem all but not less than all the then outstanding Rights
at a redemption price of $.01 per Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof (such redemption price being hereinafter referred to as the “Redemption
Price”).  The redemption of the Rights by
the Board of Directors may be made effective at such time, on such basis and
with such conditions as the Board of Directors in its sole discretion may
establish.

(c)           If the Company, not earlier than 60
Business Days nor later than 80 Business Days following the commencement of a
Qualified Offer within the meaning of Rule 14d-2(a) under the Exchange Act,
which has not been terminated prior thereto and which continues to be a
Qualified Offer, receives a written notice complying with the terms of this
Section 23(c) (the “Special Meeting Notice”) that is properly executed by the
holders of record (or their duly authorized proxy) of at least ten percent
(10%) of the Common Shares of the Company then outstanding (other than Common
Shares held by the offeror or its Affiliates and Associates) directing the
Board of Directors of the Company to submit to a vote of shareholders at a
special meeting of the shareholders of the Company (a “Special Meeting”) a
resolution authorizing the redemption of all, but not less than all, of the
then outstanding Rights at the Redemption Price (the “Redemption Resolution”),
then the Board of Directors of the Company shall take such actions as are
necessary or desirable to cause the Redemption Resolution to be so submitted to
a vote of shareholders by including a proposal relating to adoption of the
Redemption Resolution in the proxy materials of the Company for the Special
Meeting; provided, however, that in any 12-month period the Company shall not
be required to submit more than one Redemption Resolution to a vote of
shareholders with respect to Qualified Offers from any given potential
Acquiring Person (including any Affiliates or Associates).  For purposes of a Special Meeting Notice, the
record date for determining eligible holders of record shall be the 60th
Business Day following the commencement of a Qualified Offer within the meaning
of Rule 14d-2(a) under the Exchange Act. Any Special Meeting Notice must be
delivered to the Secretary of the Company at the 

 27
 

 

principal
executive offices of the Company and must set forth as to the shareholders of
record executing the request (i) the name and address of such shareholders, as
they appear on the Company’s books and records, (ii) the class and number of
Common Shares of the Company that are owned of record by each of such
shareholders, and (iii) in the case of Common Shares owned beneficially by
another Person, an executed certification by the holder of record that such
holder has executed such Special Meeting Notice only after obtaining
instructions to do so from such beneficial owner. The Board of Directors shall
set a date for determining the shareholders of record entitled to notice of and
to vote at the Special Meeting in accordance with the Company’s Articles of
Incorporation, By-Laws and applicable law. 
Subject to the requirements of applicable law, the Board of Directors of
the Company may take a position in favor of or opposed to the adoption of the
Redemption Resolution, or no position with respect to the Redemption
Resolution, as it determines to be appropriate in the exercise of its duties.
At the offeror’s request, the Company shall include in any proxy soliciting
material prepared by it in connection with the Special Meeting proxy soliciting
material submitted by the offeror; provided, however, that the offeror, by
written agreement with the Company contained in or delivered with such request,
shall have indemnified the Company against any and all liabilities resulting
from any statements found to be defamatory, misstatements, misleading
statements or omissions contained in or omitted from the offeror’s proxy
soliciting materials and have agreed to pay the Company’s incremental costs
incurred as a result of including such material in the Company’s proxy
soliciting material. Notwithstanding anything to the contrary contained in this
Agreement, if the Board of Directors determines that it is in the best
interests of shareholders to seek an alternative transaction so as to obtain
greater value for shareholders than that provided by any Qualified Offer, the
Company shall be entitled to include information relating to such alternative
transaction in the proxy soliciting material prepared by it in connection with
the Special Meeting.  If no Person has
become an Acquiring Person prior to the redemption date referred to in this
Section 23(c), and the Qualified Offer continues to be a Qualified Offer and
either (A) the Special Meeting is not held on or prior to the 90th Business Day
following receipt of the Special Meeting Notice, or (B) at the Special Meeting,
the holders of at least a majority of the Common Shares outstanding and
entitled to vote as of the record date for the Special Meeting, not giving
effect to any affirmative votes cast by the offeror or any of its Affiliates or
Associates, shall vote in favor of the Redemption Resolution (and the results
of the vote are certified as official by the appointed inspectors of election
for the Special Meeting), then all of the Rights shall be deemed redeemed by
such failure to hold the Special Meeting or as a result of such shareholder action,
as the case may be, at the Redemption Price, or the Board of Directors shall
take such other action as would prevent the existence of the Rights from
interfering with the consummation of the Qualified Offer, effective immediately
prior to the consummation of the Qualified Offer, if, and only if, the
Qualified Offer is consummated within 60 days after either (x) the close of
business on the 90th Business Day following receipt of the Special Meeting
Notice if a Special Meeting is not held on or prior to such date or (y) the
date on which the results of the vote on the Redemption Resolution at the
Special Meeting are certified as official by the appointed inspectors of
election for the Special Meeting, as the case may be.  Nothing in this subparagraph (c) shall
be construed as limiting or prohibiting the Company or any offeror from
proposing or engaging in any 

 28
 

 

acquisition,
disposition or other transfer of any securities of the Company, any merger or
consolidation involving the Company, any sale or other transfer of assets of
the Company, any liquidation, dissolution or winding-up of the Company, or any
other business combination or other transaction, or any other action by the
Company or such offeror; provided, however, that the holders of Rights shall have
the rights set forth in this Rights Agreement with respect to any such
acquisition, disposition, transfer, merger, consolidation, sale, liquidation,
dissolution, winding-up, business combination, transaction or action.

(d)           Immediately upon the effectiveness of
the action of the Board of Directors of the Company ordering the redemption of
the Rights pursuant to paragraph (b) of this Section 23 or the effectiveness of
such redemption pursuant to paragraph (c) of this Section 23 (or, if the
resolution of the Board of Directors electing to redeem the Rights pursuant to
paragraph (b) of this Section 23 states that the redemption will not be
effective until the occurrence of a specified future time or event, upon the
occurrence of such future time or event), and without any further action and
without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price.  The Company shall promptly
give public notice of any such redemption; provided, however, that the failure
to give, or any defect in, any such notice shall not affect the validity of
such redemption.  Within 10 days after
the effectiveness of the action of the Board of Directors ordering the
redemption of the Rights, the Company shall mail a notice of redemption to all
the holders of the then outstanding Rights at their last addresses as they
appear upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for the Common
Shares.  Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice.  Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made.  Neither the Company nor
any of its Affiliates or Associates may redeem, acquire or purchase for value
any Rights at any time in any manner other than that specifically set forth in
this Section 23 or in Section 24 hereof, and other than in connection with the
purchase of Common Shares prior to the Distribution Date.

 29
 

 

Section 24.             Exchange.

(a)           The Board of Directors of the Company
may, at its option, at any time after any Person becomes an Acquiring Person,
exchange all or part of the then outstanding and exercisable Rights (which
shall not include Rights that have become void pursuant to the provisions of
Section 11(a)(ii) hereof) for Common Shares of the Company at an exchange ratio
of one Common Share per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof
(such exchange ratio being hereinafter referred to as the “Exchange Ratio”).  Notwithstanding the foregoing, the Board of
Directors shall not be empowered to effect such exchange at any time after any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any such Subsidiary, any entity holding Common
Shares for or pursuant to the terms of any such plan, or any trustee,
administrator or fiduciary of such a plan), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more of the
Common Shares then outstanding.

(b)           Immediately upon the action of the
Board of Directors of the Company ordering the exchange of any Rights pursuant
to paragraph (a) of this Section 24 and without any further action and without
any notice, the right to exercise such Rights shall terminate and the only
right thereafter of a holder of such Rights shall be to receive that number of
Common Shares equal to the number of such Rights held by such holder multiplied
by the Exchange Ratio.  The Company shall
promptly give public notice of any such exchange; provided, however, that the
failure to give, or any defect in, such notice shall not affect the validity of
such exchange.  The Company promptly
shall mail a notice of any such exchange to all of the holders of such Rights
at their last addresses as they appear upon the registry books of the Rights
Agent.  Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder
receives the notice.  Each such notice of
exchange will state the method by which the exchange of the Common Shares for
Rights will be effected and, in the event of any partial exchange, the number
of Rights which will be exchanged.  Any
partial exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become void pursuant to the provisions of Section
11(a)(ii) hereof) held by each holder of Rights.

(c)           In the event that there shall not be
sufficient Common Shares issued but not outstanding or authorized but unissued
to permit any exchange of Rights as contemplated in accordance with this
Section 24, the Company shall take all such action as may be necessary to
authorize additional Common Shares for issuance upon exchange of the Rights.

(d)           The Company shall not be required to
issue fractions of Common Shares or to distribute certificates which evidence
fractional Common Shares.  In lieu of
such fractional Common Shares, the Company may, at its sole option, pay to the
registered holders of the Right Certificates with regard to which such
fractional Common Shares would otherwise be issuable an amount in cash equal to
the same fraction of the current market value of a whole Common Share.  For the purposes of this paragraph (d), the
current market value of a whole Common Share shall be the closing price of a
Common Share (as determined pursuant to the second sentence of Section 11(d)
hereof) for the Trading Day immediately prior to the date of exchange pursuant
to this Section 24.

 30
 

 

Section 25.             Notice of Certain Events.

(a)           In case the Company shall propose,
after the Distribution Date, (i) to pay any dividend payable in stock of any
class to the holders of its Common Shares or to make any other distribution to
the holders of its Common Shares (other than a regular quarterly cash
dividend), (ii) to offer to the holders of its Common Shares rights or warrants
to subscribe for or to purchase any additional Common Shares or shares of stock
of any class or any other securities, rights or options, (iii) to effect any
reclassification of its Common Shares (other than a reclassification involving
only the subdivision of outstanding Common Shares), (iv) to effect any
consolidation or merger into or with, to effect any share exchange with or to
effect any sale or other transfer (or to permit one or more of its Subsidiaries
to effect any sale or other transfer), in one or more transactions, of 50% or
more of the assets or earning power of the Company and its Subsidiaries (taken
as a whole) to, any other Person, (v) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company shall give to
each holder of a Right Certificate, in accordance with Section 26 hereof, a
notice of such proposed action, which shall specify the record date for the
purposes of such stock dividend, or distribution of rights or warrants, or the
date on which such reclassification, consolidation, merger, share exchange,
sale, transfer, liquidation, dissolution, or winding up is to take place and
the date of participation therein by the holders of the Common Shares, if any
such date is to be fixed, and such notice shall be so given in the case of any
action covered by clause (i) or (ii) above at least 10 days prior to the record
date for determining holders of the Common Shares for purposes of such action,
and in the case of any such other action, at least 10 days prior to the date of
the taking of such proposed action or the date of participation therein by the
holders of the Common Shares, whichever shall be the earlier.

(b)           In case a Section 11(a)(ii) Event
shall occur, then the Company shall as soon as practicable thereafter give to
each holder of a Right Certificate, in accordance with Section 26 hereof, a
notice of the occurrence of such event, which notice shall describe such event
and the consequences of such event to holders of Rights under Section 11(a)(ii)
hereof.

Section 26.             Notices.  Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the
holder of any Right Certificate to or on the Company shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Rights Agent) as follows:

Briggs & Stratton Corporation

12301 West Wirth Street

Wauwatosa, Wisconsin 53222

Attention:     Corporate Secretary

Subject to the provisions of Section 21 hereof, any
notice or demand authorized by this Agreement to be given or made by the
Company or by the holder of any Right Certificate to or on the Rights Agent
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Company)
as follows:

National City Bank, Department 3116

Corporate Trust Administration

629 Euclid Avenue, Suite 635

Cleveland, Ohio 44114

Notice or demands authorized by this Agreement to be
given or made by the Company or the Rights Agent to the holder of any Right
Certificate shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as
shown on the registry books of the Company.

 31
 

 

Section 27.             Supplements
and Amendments.  The Company may from
time to time supplement or amend
this Agreement without the approval of any holders of Right Certificates in
order to cure any ambiguity, to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions herein,
or to make any other provisions with respect to the Rights which the Company
may deem necessary or desirable, any such supplement or amendment to be
evidenced by a writing signed by the Company and the Rights Agent; provided,
however, that from and after such time as any Person becomes an Acquiring
Person, this Agreement shall not be amended in any manner which would adversely
affect the interests of the holders of Rights.

Section 28.             Successors.  All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights
Agent shall bind and inure to the benefit of their respective successors and
assigns hereunder.

Section 29.             Determinations and Actions by the
Board of Directors.

(a)           For all purposes of this Agreement,
any calculation of the number of Common Shares outstanding at any particular
time, including for purposes of determining the particular percentage of such
outstanding Common Shares of which any Person is the Beneficial Owner, shall be
made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General
Rules and Regulations under the Exchange Act as in effect on the date hereof.

(b)           The Board of Directors of the Company
shall have the exclusive power and authority to administer this Agreement and
to exercise all rights and powers specifically granted to the Board or to the
Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret
the provisions of this Agreement and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement (including,
without limitation, a determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board of Directors in
good faith shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights and all other parties, and (y) not
subject any member of the Board of Directors to any liability to the holders of
the Rights or to any other person.

(c)           Without limiting the foregoing,
nothing contained herein shall be construed to suggest or imply that the Board
of Directors shall not be entitled to reject any Qualified Offer or any other
tender offer or exchange offer or other acquisition proposal, or to recommend
that holders of Common Shares reject any Qualified Offer or any other tender
offer or exchange offer or other acquisition proposal, or to take any other
action (including, without limitation, the commencement, prosecution, defense
or settlement of any litigation and the submission of additional or alternative
offers or other proposals) with respect to any Qualified Offer or any other
tender offer or exchange offer or other acquisition proposal that the Board of
Directors believes is necessary or appropriate in the exercise of its fiduciary
duties.

 32
 

 

Section 30.             Benefits
of this Agreement.  Nothing in this
Agreement shall be construed to give to any person or corporation other
than the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Shares) any legal
or equitable right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the Rights Agent
and the registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Shares).

Section 31.             Severability.  If any term, provision, covenant or
restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.

Section 32.             Governing Law.  This Agreement and each Right Certificate
issued hereunder shall be
deemed to be a contract made under the laws of the State of Wisconsin and for
all purposes shall be governed by and construed in accordance with the laws of
such State applicable to contracts to be made and performed entirely within
such State.

Section 33.             Counterparts.  This Agreement may be executed in any number
of counterparts and each
of such counterparts shall for all purposes be deemed to be an original, and
all such counterparts shall together constitute but one and the same
instrument.

Section 34.             Descriptive Headings.  Descriptive headings of the several Sections
of this Agreement are
inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.

 33
 

 

IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be duly executed and
attested, all as of the
day and year  first above written.

 

	
   

  	
  BRIGGS & STRATTON
  CORPORATION

  
	
   

  	
   

  
	
  Attest:

  	
   

  
	
  By:

  	
  /s/ Robert F. Heath

  	
   

  	
  By:

  	
  /s/ Thomas R. Savage

  	
   

  
	
   

  	
  Robert F. Heath

  	
   

  	
  Thomas R. Savage

  
	
   

  	
  Secretary

  	
   

  	
  Senior Vice President -

  Administration

  
	
   

  	
   

  
	
   

  	
  NATIONAL CITY BANK

  
	
   

  	
   

  
	
  Attest:

  	
   

  
	
  By:

  	
  s/ Matthew R. Hostelley

  	
   

  	
  By:

  	
  /s/ Victor W. LaTessa

  	
   

  
	
   

  	
  Matthew R. Hostelley

  	
   

  	
  Victor W. LaTessa

  
	
   

  	
  Vice President

  	
   

  	
  Vice President

  
									

 

 34

Exhibit A

Form of Right Certificate

	
  Certificate No. R-

  	
   

  	
   

  	
  Rights      

  

 

NOT EXERCISABLE AFTER OCTOBER 18, 2009 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS AS PROVIDED IN THE RIGHTS AGREEMENT. THE RIGHTS
ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT.

Right Certificate

BRIGGS & STRATTON CORPORATION

This certifies that             ,
or registered assigns, is the registered owner of the number of Rights set
forth above, each of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Rights Agreement, dated as of August 7, 1996,
as amended through August 9, 2006, and as such agreement may be amended (the “Rights
Agreement”), between Briggs & Stratton Corporation, a Wisconsin corporation
(the “Company”), and National City Bank (the “Rights Agent”), to purchase from
the Company at any time after the Distribution Date (as such term is defined in
the Rights Agreement) and prior to 5:00 P.M., Milwaukee, Wisconsin time, on
October 18, 2009 at the principal office of the Rights Agent, or at the office
of its successor as Rights Agent, one-half of one fully paid nonassessable
(except as otherwise provided by any corporation law applicable to the Company)
share of Common Stock, par value $0.01 per share (the “Common Shares”), of the
Company, at a purchase price of $80 per full Common Share (as adjusted as a
result of the two-for-one stock split of the Common Shares effected as a 100%
stock dividend effective October 29, 2004) (the “Purchase Price”), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase duly executed. The number of Rights evidenced by this Right
Certificate (and the number of Common Shares which may be purchased upon
exercise hereof) set forth above, and the Purchase Price set forth above, are
the number and Purchase Price as of August 7, 1996, based on the Common Shares
as constituted at such date.  As provided
in the Rights Agreement, the Purchase Price and the number of Common Shares
which may be purchased upon the exercise of the Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the happening of
certain events.

This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description
of the rights, limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the Right
Certificates.  Copies of the Rights
Agreement are on file at the principal executive offices of the Company and the
above-mentioned offices of the Rights Agent.

 

This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the Rights Agent, may
be exchanged for another Right Certificate or Right Certificates of like tenor
and date evidencing Rights entitling the holder to purchase a like aggregate
number of Common Shares as the Rights evidenced by the Right Certificate or
Right Certificates surrendered shall have entitled such holder to
purchase.  If this Right Certificate
shall be exercised in part, the holder shall be entitled to receive upon
surrender hereof another Right Certificate or Right Certificates for the number
of whole Rights not exercised.

Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate (i) may be redeemed by the Company at a
redemption price of $.01 per Right or (ii) may be exchanged in whole or in part
for Common Shares.

The Company is not required to issue any fractional
Common Shares upon the exercise of any Right or Rights evidenced hereby.  In lieu thereof, the Company may, at its sole
option, make a cash payment, as provided in the Rights Agreement.

No holder of this Right Certificate shall be entitled
to vote or receive dividends or be deemed for any purpose the holder of the
Common Shares or of any other securities of the Company which may at any time
be issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the Rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.

This Right Certificate shall not be valid or
obligatory for any purpose until it shall have been countersigned by the Rights
Agent.

WITNESS the facsimile signature of the proper officers
of the Company and its corporate seal. 
Dated as of _________, 20__.

 

	
  ATTEST:

  	
  BRIGGS & STRATTON CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  
	
  Countersigned:

  	
   

  
	
   

  	
   

  
	
  NATIONAL CITY BANK

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized
  Signature

  	
   

  	
   

  
							

 

Form of Reverse
Side of Right Certificate

 2

FORM OF ASSIGNMENT

(To be executed by the
registered holder if such

holder desires to transfer the Right Certificate.)

	
  FOR VALUE RECEIVED

  	
   

  	
  hereby

  
	
  sells, assigns and transfers unto

  	
   

  
	
   

  
	
   

  	
  (Please
  print name and address of transferee)

  	
   

  
	
   

  	
  this

  
	
   Right
  Certificate, together with all right, title and interest therein, and does
  hereby irrevocably constitute and appoint 

  
	
   

  	
  Attorney, to transfer the within Right Certificate
  on the books of the within-named Company, with full 

  
	
  power of substitution

  	
   

  
								

 

	
  Date:

  	
   

  	
  ,20

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Signature

  
						

 

Signature Guaranteed:

Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of the National Association
of Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States.

 

The undersigned hereby
certifies that the Rights evidenced by this Right Certificate are not
beneficially owned by an Acquiring Person or an Affiliate or Associate thereof
(as defined in the Rights Agreement).

	
  

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Signature

  

 

 

 

Form of Reverse Side of
Right Certificate — continued

FORM OF ELECTION TO PURCHASE

(To be executed if holder
desires to

exercise Rights represented by the Right Certificate.)

To BRIGGS & STRATTON
CORPORATION:

	
  The undersigned hereby
  irrevocably elects to exercise

  
	
   

  	
  Rights represented by this Right Certificate to
  purchase the 

  

Common Shares issuable upon the exercise of such
Rights and requests that certificates for such Common Shares be issued in the
name of:

Please insert social
security

or other identifying number

	
  

  
	
  (Please print
  name and address)

  
	
   

  
	
   

  

 

If such number of Rights shall not be all the Rights
evidenced by this Right Certificate, a new Right Certificate for the balance
remaining of such Rights shall be registered in the name of and delivered to:

Please insert social
security

or other identifying number

	
  

  
	
  (Please print
  name and address)

  
	
   

  
	
   

  

 

	
  Date:

  	
   

  	
  ,20

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Signature

  
						

 

Signature Guaranteed:

Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of the National Association
of Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States.

 2
 

 

Form of Reverse
Side of Right Certificate — continued

 

The undersigned hereby certifies that the Rights
evidenced by this Right Certificate are not beneficially owned by an Acquiring
Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement).

	
  

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Signature

  

 

 

NOTICE

The signature in the Form of Assignment or Form of
Election to Purchase, as the case may be, must conform to the name as written
upon the face of this Right Certificate in every particular, without alteration
or enlargement or any change whatsoever.

In the event the certification set forth above in the
Form of Assignment or the Form of Election to Purchase, as the case may be, is
not completed, the Company and the Rights Agent will deem the beneficial owner
of the Rights evidenced by this Right Certificate to be an Acquiring Person or
an Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.

 3
 

 

Exhibit B

SUMMARY OF RIGHTS TO PURCHASE

COMMON SHARES

On August 6, 1996, the Board of Directors of Briggs
& Stratton Corporation (the “Company”) declared a dividend of one common
share purchase right (a “Right”) for each outstanding share of common stock,
par value $0.01 per share (the “Common Shares”), of the Company.  The dividend is payable on August 19, 1996
(the “Record Date”) to the shareholders of record on that date.  Each Right entitles the registered holder to
purchase from the Company one-half of one Common Share of the Company at a
price (the “Purchase Price”) of $80 per full share (after giving effect to the
two-for-one stock split of the Common Shares effected as a 100% stock dividend
effective October 29, 2004), subject to adjustment.  The description and terms of the Rights are
set forth in a Rights Agreement (the “Rights Agreement”) between the Company
and National  City Bank, as Rights Agent
(the “Rights Agent”) dated as of August 7, 1996, as amended through August 9,
2006 and as may thereafter be amended. 
Until the earlier to occur of (i) 10 days following public announcement
that a person or group of affiliated or associated persons (other than the
Company, a subsidiary of the Company or an employee benefit plan of the Company
or a subsidiary) (an “Acquiring Person”) have acquired beneficial ownership of
20% or more of the outstanding Common Shares or (ii) 10 business days (or such
later date as may be determined by action of the Company’s Board of Directors
prior to such time as any person or group of affiliated persons becomes an
Acquiring Person) following the commencement of, or announcement of an
intention to make, a tender offer or exchange offer the consummation of which
would result in the beneficial ownership by a person or group (other than the
Company, a subsidiary of the Company or an employee benefit plan of the Company
or a subsidiary) of 20% or more of the outstanding Common Shares (the earlier of
such dates being called the “Distribution Date”), the Rights will be evidenced,
with respect to any of the Common Share certificates outstanding as of the
Record Date, by such Common Share certificate. 
Notwithstanding the foregoing, any other person or group of affiliated
or associated persons who, at the close of business on August 7, 1996, was the
beneficial owner of at least 5,785,400 Common Shares (which number of shares
constituted 20% of the number of Common Shares outstanding on such date, without
giving effect to the two-for-one stock split of the Common Shares effective
October 29, 2004) will not be deemed an “Acquiring Person” unless such person
or group of affiliated or associated persons acquires beneficial ownership of
additional Common Shares at any time that such person or group of affiliated or
associated persons is or thereby becomes the beneficial owner of 20% or more of
the Common Shares then outstanding.

The Rights Agreement provides that, until the
Distribution Date (or earlier redemption or expiration of the Rights), (i) the
Rights will be transferred with and only with the Common Shares; (ii) new
Common Share certificates issued after the Record Date upon transfer or new
issuance of Common Shares will contain a notation incorporating the Rights
Agreement by reference; and (iii) the surrender for transfer of any
certificates for Common Shares outstanding as of the Record Date, even without
such notation or a copy of this Summary of Rights being attached thereto, will
also constitute the transfer of the Rights associated with the Common Shares
represented by such certificate.  As soon
as practicable following  the
Distribution Date, separate certificates evidencing the Rights (“Right
Certificates”) will be mailed to holders of record of the Common Shares as of
the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.

 4
 

 

The Rights are not exercisable until the Distribution
Date.  The Rights will expire on October
18, 2009 (the “Final Expiration Date”), unless the Final Expiration Date is
extended or unless the Rights are earlier redeemed or exchanged by the Company
(including by shareholder action in connection with a “Qualified Offer” as
defined in the Agreement), in each case, as described below.

The Purchase Price payable, and the number of Common
Shares or other securities or property issuable, upon exercise of the Rights
are subject to adjustment from time to time to prevent dilution (i) in the
event of a stock dividend on, or a subdivision, combination or reclassification
of, the Common Shares, (ii) upon the grant to holders of the Common Shares of
certain rights or warrants to subscribe for or purchase Common Shares at a
price, or securities convertible into Common Shares with a conversion price,
less than the then-current market price of the Common Shares or (iii) upon the
distribution to holders of the Common Shares of evidences of indebtedness or
assets (excluding regular periodic cash dividends paid out of earnings or
retained earnings or dividends payable in Common Shares) or of subscription
rights or warrants (other than those referred to above).

In the event that the Company is acquired in a merger
or other business combination transaction or 50% or more of its consolidated assets
or earning power are sold, proper provision will be made so that each holder of
a Right will thereafter have the right to receive, upon the exercise thereof at
the then-current Purchase Price, that number of shares of common stock of the
acquiring company which at the time of such transaction will have a market
value of two times the then current Purchase Price.  In the event that any person or group of
affiliated or associated persons becomes an Acquiring Person, each holder of a
Right, other than Rights beneficially owned by the Acquiring Person (which will
thereafter be void), will thereafter have the right to receive upon exercise at
the then current Purchase Price that number of Common Shares having a market
value of two times the Purchase Price.

At any time after any Person becomes an Acquiring
Person and prior to the acquisition by such person or group of 50% or more of
the outstanding Common Shares, the Board of Directors of the Company may
exchange the Rights (other than Rights owned by such person or group which will
have become void), in whole or in part, at an exchange ratio of one Common
Share per Right (subject to adjustment).

With certain exceptions, no adjustment in the Purchase
Price will be required until cumulative adjustments require an adjustment of at
least 1% in such Purchase Price.  The
Company is not required to issue any fractional Common Shares and in lieu
thereof, an adjustment in cash may be made based on the market price of the
Common Shares on the last trading day prior to the date of exercise.

At any time prior to the acquisition by a person or
group of affiliated or associated persons of beneficial ownership of 20% or
more of the outstanding Common Shares, the Board of Directors of the Company
may redeem the Rights in whole, but not in part, at a price of $.01 per Right
(the “Redemption Price”).  The redemption
of the Rights may be made effective at such time on such basis with such
conditions as the Board of Directors in its sole discretion may establish.  In addition, if the Company receives a
Qualified Offer (as defined in the Agreement), then the Rights may be redeemed
by way of shareholder action taken at a special meeting of 

 5
 

 

shareholders called by the Board upon the written
notice of the holders of at least 10% of Common Shares then outstanding (other
than Common Shares held by the offeror or its Affiliates and Associates) for
the purpose of voting on a resolution accepting the Qualified Offer and
authorizing the redemption of the Rights pursuant to the provisions of the
Agreement.  The written notice must be
received by the Company not earlier than 60 nor later than 80 business days
following the commencement of a Qualified Offer that has not been terminated
prior thereto and that continues to be a Qualified Offer.  The special meeting must be held on or prior
to the 90th business day following Company’s receipt of such notice.  Such an action by the shareholders requires
the affirmative vote of a majority of all Common Shares entitled to vote on
such issue (excluding Common Shares held by the offeror and its Affiliates or
Associates). If either (A) the special meeting is not held on or prior to the
90th business day following receipt of the special meeting notice, or (B) at
the special meeting, the requisite holders of Common Shares vote in favor of
the redemption resolution, then all of the Rights will be deemed redeemed by
such failure to hold the special meeting or as a result of such shareholder
action, as the case may be, at the Redemption Price, or the Board of Directors
shall take such other action as would prevent the existence of the Rights from
interfering with the consummation of the Qualified Offer, effective immediately
prior to the consummation of the Qualified Offer if, and only if, the Qualified
Offer is consummated within 60 days after either (x) the close of business on
the 90th business day following receipt of the special meeting notice if a
special meeting is not held on or prior to such date or (y) the date on which
the results of the vote on the redemption resolution at the special meeting are
certified as official, as the case may be. 
Immediately upon any redemption of the Rights, the right to exercise the
Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.

“Qualified Offer” means an offer that has each of the
following characteristics:

·                  a fully financed all-cash tender
offer or an exchange offer offering at least 70 percent cash and Common Shares
of the offeror, in each such case for any and all of the outstanding Common
Shares of the Company;

·                  an offer that has commenced within
the meaning of Rule 14d-2(a) under the Exchange Act;

·                  an offer whose per-share offer price
(A) is greater than the highest reported market price for the Common Shares of
the Company during the 24-month period immediately preceding the date on which
the offer is commenced and (B) represents a reasonable premium above the
average of the closing prices for the five trading days immediately preceding
the date on which the offer is commenced; 

·                  an
offer that (A) is accompanied by a written opinion of a nationally recognized
investment banking firm that is addressed to the Company and the holders of
Common Shares of the Company other than such Person and states that the price
to be paid to such holders pursuant to the offer is fair from a financial point
of view to such holders and includes any written presentation of such firm
showing the analysis and range of values underlying such conclusions, which
written opinion and any such presentation are updated and provided to the
Company prior to the date such offer is consummated, and (B) within 20 business
days after the commencement date of the offer (or within 10 business days after
any increase in the offer consideration), does not result in a nationally 

 6
 

 

recognized investment
banking firm retained by the Board of Directors of the Company rendering an opinion
to the Board of Directors of the Company that the consideration being offered
to the holders of the Common Shares is either unfair or inadequate;

·                  if the offer includes Common Shares
of the offeror, an offer pursuant to which (A) the offeror shall permit a
nationally recognized investment banking firm retained by the Board of
Directors of the Company and legal counsel designated by the Company to have
access to such offeror’s books, records, management, accountants and other
appropriate outside advisers for the purposes of permitting such investment
banking firm and such legal counsel to conduct a due diligence review of the
offeror in order to permit such investment banking firm to be able to render an
opinion to the Board of Directors of the Company with respect to whether the
consideration being offered to the holders of the Common Shares of the Company
is fair or adequate, and (B) within 10 business days after such investment
banking firm shall have notified the Company and the offeror that it had
completed the due diligence review to its satisfaction (or following completion
of such due diligence review within 10 business days after any increase in the
consideration being offered), such investment banking firm does not render an
opinion to the Board of Directors of the Company that the consideration being
offered to the holders of the Common Shares of the Company is either unfair or
inadequate and such investment banking firm does not after the expiration of
such 10 business day period render an opinion to the Board of Directors of the
Company that the consideration being offered to the holders of the Common
Shares of the Company has become either unfair or inadequate based on a
subsequent disclosure or discovery of a development or developments that have
had or are reasonably likely to have a material adverse affect on the value of
the Common Shares of the offeror;

·                  an offer that is subject only to the
minimum tender condition described below and other usual and customary terms
and conditions, which conditions shall not include any financing, funding or
similar condition or any requirements with respect to the offeror or its agents
being permitted any due diligence with respect to the books, records,
management, accountants and other outside advisers of the Company;

·                  an offer pursuant to which the
Company has received an irrevocable written commitment of the offeror that the
offer will remain open for at least 60 business days and, if a special meeting
is duly requested under the redemption provisions, for, at least 10 business
days after the date of the special meeting or, if no special meeting is held
within 90 business days following receipt of the special meeting notice, for at
least 10 business days following such 90 business day period;

·                  an offer pursuant to which the
Company has received an irrevocable written commitment by the offeror that the
offer, it if is otherwise to expire prior thereto, will be extended for at
least 20 business days after any increase in the price offered, and after any
bona fide alternative offer is commenced;

·                  an offer that is conditioned on a
minimum of at least 90% of the outstanding Common Shares (other than Common
Shares held by the offeror) being tendered and not withdrawn as of the offer’s
expiration date, which condition shall not be waivable;

·                  an offer pursuant to which the
Company has received an irrevocable written commitment by the offeror to
consummate as promptly as practicable upon successful completion of the offer a
second step transaction whereby all Common Shares not tendered into the 

 7
 

 

offer will be acquired at
the same amount and form of consideration per share actually paid pursuant to
the offer, subject to shareholders’ statutory appraisal rights, if any;

·                  an offer pursuant to which the
Company has received an irrevocable written commitment of the offeror that no
amendments will be made to the offer to reduce the offer consideration, change
the form of consideration offered, reduce the number of shares being sought, or
otherwise change the terms of the offer in a way that is adverse to a tendering
shareholder;

·                  if the offer includes Common Shares
of the offeror, (A) the offeror is a publicly owned United States corporation,
and its Common Shares are freely tradable and are listed or admitted to trading
on either the New York Stock Exchange or the Nasdaq National Market, (B) no
shareholder approval of the offeror is required to issue such Common Shares,
or, if required, such approval has already been obtained, (C) no Person beneficially
owns more than 20% of the voting stock of the offeror at the time of
commencement of the offer or at any time during the term of the offer, and (D)
no other class of voting stock of the offeror is outstanding, and the offeror
meets the registrant eligibility requirements for use of Form S-3 for
registering securities under the Securities Act of 1933, as amended, including,
without limitation, the filing of all required Exchange Act reports in a timely
manner during the 12 calendar months prior to the date of commencement of the
offer;

·                  an offer pursuant to which the
Company has received an irrevocable written commitment of the offeror that the
offeror will pay (or share with any other offeror) at least one-half of the
Company’s costs of a special meeting requested with respect to such offer; and

·                  an
offer pursuant to which the Company has received an irrevocable written
commitment of the offeror that if the offer is not consummated, the offeror
will not make any offer for or purchase any equity securities of the Company
for a period of one year after the commencement of the original offer if such
original offer does not result in the tender of at least 85% of the outstanding
Common Shares, not owned by the offeror.

The terms of the Rights may be amended by the Board of
Directors of the Company without the consent of the holders of the Rights
except that from and after such time as any person or group of affiliated or
associated persons becomes an Acquiring Person no such amendment may adversely
affect the interests of the holders of the Rights.

Until a Right is exercised, the holder thereof, as
such, will have no rights as a shareholder of the Company, including, without limitation,
the right to vote or to receive dividends.

A copy of the Rights Agreement, as amended through
August 9, 2006, has been filed with the Securities and Exchange Commission as
an Exhibit to the Company’s Amended Registration Statement on Form 8-A/A filed
on August 15, 2006.  A copy of the Rights
Agreement is available free of charge from the Company.  This summary description of the Rights does
not purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, which is hereby incorporated herein by reference.

 8Exhibit 10.5

CONSULTING
AGREEMENT

THIS CONSULTING AGREEMENT (this “Agreement”) is made
as of August 14, 2006 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 Paul M. Neylon (the “Consultant”).

WHEREAS the Consultant has notified the Company that
he plans to retire from the Company effective August 31, 2006, and the parties
mutually desire that the Consultant be retained by the Company after his
retirement to provide certain consulting services in accordance with the
provisions of this Agreement,

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

1.   Scope of Work.   The
Consultant is hereby retained by the Company for the period from September 1,
2006 through December 31, 2007 to advise and act as a consultant to the Company
in connection with the following activities, when and as requested by the
Company’s Executive Vice President and Chief Operating Officer:

(a)            Provide
advice to management relating to the Company’s current and future manufacturing
operations and engine component suppliers worldwide.

(b)           Provide
advice to management relating to implementation and optimization of the Company’s
strategic plan.

(c)            Assist
management in training employees of the Company who are engaged in
manufacturing operations.

(d)           At
management’s request, communicate with suppliers and provide other services as
assigned.

2.   Compensation.   The Company
shall pay the Consultant in consideration of this retainer and for services
performed hereunder at a rate of $25,416.67 per month from September 1, 2006
through December 31, 2007, plus reasonable travel and living expenses payable
at the end of each month. The Consultant 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.

3.   Standard of Performance.   Consultant
shall perform the 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 the Consultant in performing services under this
Agreement. Except with the prior written approval of an authorized representative
of the Company, the Consultant 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 the Consultant becomes aware
of in the course of his work under this Agreement.

5.   Records.   The Consultant
will keep such written records and make such reports as may be requested by the
Company. The Consultant 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.   The
Consultant agrees that in performing services under this Agreement he will
comply with all applicable Company policies concerning business practices. The
Consultant further agrees that, during the term of Agreement and for two years
after its expiration, 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 the Company insofar as such
employment, service, work or business may involve or be closely related to the
services provided by the Consultant under this Agreement, or where any third
party which competes with the Company in the field of this Agreement might be
benefited by the services rendered or information gained by the Consultant
under this Agreement.

7.   Contractor Status.   In
furnishing services pursuant to this Agreement, the Consultant will at all
times be acting as an independent contractor. The methods and means of
performance of all tasks assigned to the Consultant under this Agreement will
be entirely at his discretion. Consultant will not be an employee of the
Company and will not by reason of this Agreement or his services 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 the Consultant under Sections 4, 5 and 6 above shall survive
and not be affected by any termination of this Agreement. Upon termination, the
Consultant will be paid for services rendered and reimbursable expenses
incurred up to the date of such termination and not thereafter. Payment upon
termination will be accepted by the Consultant 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 Consultant’s employment
agreement with the Company that are applicable after his retirement. All
services performed by the Consultant for the Company while this Agreement is in
effect shall be subject to its provisions. All prior and collateral
understandings, agreements and promises with respect thereto are merged herein.
This 

 2
 

 

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.

In the event that the Consultant 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 Consultant
have signed this Agreement as of the date first above written.

	
  PAUL M. NEYLON

  	
   

  	
  BRIGGS & STRATTON CORPORATION

  
	
   

  	
   

  	
   

  
	
  /s/ Paul M.
  Neylon

  	
   

  	
  By

  	
  /s/ John S. Shiely

  
	
   

  	
   

  	
   

  	
  John S. Shiely

  
	
   

  	
   

  	
   

  	
  Chairman, President & CEO

  

 

 3

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