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BRIGGS & STRATTON CORPORATION AND SUBSIDIARIES
1999 Annual Report on Form 10-K
EXHIBIT NO. 10.18
BRIGGS & STRATTON CORPORATION
KEY EMPLOYEE SAVINGS AND INVESTMENT PLAN
Effective July 1, 1999
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS 1
1.1 Account 1
1.2 Beneficiary 1
1.3 Board 1
1.4 Committee 1
1.5 Effective Date 1
1.6 Employer 2
1.7 Participant 2
1.8 Plan 2
1.9 Plan Year 2
1.10 Regular Compensation 2
1.11 Total Bonus Payout 2
1.12 Valuation Date 2
ARTICLE II PARTICIPATION IN THE PLAN 3
2.1 Eligibility 3
ARTICLE III DEFERRAL CONTRIBUTIONS 4
3.1 Manner of Electing Deferral Contributions With
Respect to Regular Compensation 4
3.2 Manner of Electing Deferral Contributions With
Respect to Total Bonus Payout 4
3.3 Discontinuance of Offset 5
3.4 Crediting to Deferral Contributions Account 5
ARTICLE IV EMPLOYER MATCHING CONTRIBUTIONS 6
4.1 Amount 6
4.2 Crediting to Employer Matching Contribution
Account 6
ARTICLE V INTEREST 7
5.1 Crediting of Interest 7
5.2 Reports to Participants 7
5.3 Grantor Trust only 7
ARTICLE VI DISTRIBUTION 9
6.1 Distribution 9
6.2 Committee Discretion to Accelerate 9
6.3 Change in Law 10
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ARTICLE VII ADMINISTRATION 11
7.1 In General 11
7.2 Committee Discretion 11
7.3 Committee Members' Conflict of Interest 12
7.4 Governing Law 12
7.5 Expenses 12
7.6 Minor or Incompetent Payees 12
7.7 Withholding 12
7.8 Indemnification 13
ARTICLE VIII BENEFITS UNFUNDED 14
ARTICLE IX NONALIENATION OF BENEFITS 15
ARTICLE X CLAIMS PROCEDURE 16
10.1 Claims 16
10.2 Review Procedure 16
ARTICLE XI AMENDMENT AND TERMINATION 17
ARTICLE XII MISCELLANOUS 18
12.1 No Right to Continued Employment 18
12.2 Impact on Other Plans 18
12.3 Severability 18
12.4 Gender and Number 18
12.5 Evidence Conclusive 18
12.6 Status of Plan Under ERISA 19
12.7 Name and Address Changes 19
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ARTICLE I
Definitions
1.1 "Account" means the records of the interests of a Participant in the
Plan.
(a) "Matching Contributions Account" means the record of a Participant's
interest in the Plan attributable to Employer Matching Contributions
described in Article IV.
(b) "Deferral Contributions Account" means the record of a Participant's
interest in the Plan attributable to his Deferral Contributions
described in Article III.
1.2 "Beneficiary" means the person designated by a Participant to receive
any payments due hereunder upon the death of the Participant. All Beneficiary
designations shall be made in writing in such form and manner as may from time
to time be prescribed by the Committee. The designation on file with the
Committee at the time of the Participant's death shall be controlling. In the
event the deceased Participant has not designated a Beneficiary, or should such
Participant have no designated Beneficiary surviving, his undistributed Account
balance shall be paid to:
(a) his surviving spouse, if any;
(b) if no surviving spouse, then his surviving children, including legally
adopted children, in equal shares; or
(c) if no surviving spouse or children, then to the Participant's estate.
1.3 "Board" means the Board of Directors of the Employer.
1.4 "Committee" means the Nominating, Compensation and Governance Committee
of the Board.
1.5 "Effective Date" means the effective date of this Briggs & Stratton
Corporation Key Employee Savings and Investment Plan and shall be July 1, 1999.
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1.6 "Employer" means Briggs & Stratton Corporation.
1.7 "Participant" shall mean an employee of the Employer designated as
eligible under Section 2.1 and any person who previously participated in the
Plan and is entitled to benefits hereunder.
1.8 "Plan" means the Briggs & Stratton Corporation Key Employee Savings
and Investment Plan as set forth in this document and all subsequent amendments
hereto.
1.9 "Plan Year" means the twelve-month period on which the records of the
Plan are maintained, currently the Employer's fiscal year, which is the period
beginning July 1 and ending June 30.
1.10 "Regular Compensation" means the total compensation payable to a
Participant by the Employer for any period (prior to elective deferrals under
any deferral agreement) which would be taken into account as Annual Pay, as
defined in Section 1.05 of the Briggs & Stratton Corporation Employee Savings
and Investment Plan; provided, however, that the maximum limit on Annual Pay in
that Section 1.05 shall be ignored and, also, the portion of Annual Pay
consisting of a Participant's bonus under the Briggs & Stratton Corporation
Economic Value Added Incentive Compensation Plan shall be excluded.
1.11 "Total Bonus Payout" means the amount of bonus that would be paid to a
Participant in cash in any Plan Year (prior to elective deferrals under any
deferral agreement) under the Briggs & Stratton Corporation Economic Value Added
Incentive Compensation Plan.
1.12 "Valuation Date" means the last day of each calendar month.
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ARTICLE II
Participation In The Plan
2.1 Eligibility.
Employees eligible to participate in the Plan are all Board elected
officers and such other key employees as are recommended by management and
approved by the Committee. Each person who is a Board elected officer on July 1,
1999 shall become a Participant as of that date. Each other person who becomes a
Board elected officer shall become a Participant in the Plan effective with the
beginning of the next calendar quarter following the date such person becomes a
Board elected officer. Such other key employees who are approved by the
Committee for participation shall become Participants on the date specified by
the Committee.
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ARTICLE III
Deferral Contributions
3.1 Manner of Electing Deferral Contributions With Respect To Regular
Compensation.
(a) A Participant in the Plan may (on a form provided by the Employer)
elect to defer a whole percentage amount (not exceeding 12%) of the
Participant's Regular Compensation earned during periods subsequent to such
election. For an individual who becomes a Participant on July 1, 1999, the
individual's initial deferral election shall be made by June 15, 1999 but shall
not become effective until July 1, 1999. Similarly, an individual who becomes a
Participant on a later date who desires that deferrals commence on the date he
becomes a Participant shall make an initial election at least 15 days before
actually becoming a Participant but the election shall not become effective
until the date the individual becomes a Participant. A Participant's deferral
election shall continue in effect for the remainder of the Plan Year in which it
becomes effective and for all subsequent Plan Years until prospectively modified
or revoked by filing a new election. Any such election (or modification or
revocation of an election) shall be filed by the 15th day of the month
preceding the beginning of any calendar quarter and shall be effective
prospectively effective with the first day of that calendar quarter so that the
election is made before the period of service for which compensation is earned.
(b) Notwithstanding any other provision of this Plan to the contrary, the
amount of a Participant's Regular Compensation which shall be deferred each
payroll period shall be reduced and offset by an amount so that (i) plus (ii)
equals the deferral which would have been made in the absence of the offset
where (i) equals the actual deferral after the offset and (ii) equals (A) 6%
times (B) the Participant's Regular Compensation minus the actual deferral made
after the offset.
3.2 Manner of Electing Deferral Contributions With Respect To Total Bonus
Payout.
(a) A Participant may elect to defer a whole percentage amount (not
exceeding 12%) of the Participant's Total Bonus Payout paid during any Plan Year
beginning after June 30, 2000. A Total Bonus Payout, if any, is made in August
of each year. An election to defer a Total Bonus Payout must be made no later
than March 15 preceding the date the Total Bonus Payout is made. The Participant
must file a separate Total Bonus Payout election with respect to each Plan Year
in which the Participant desires to defer a portion of the Total Bonus Payout.
(b) Notwithstanding any other provision of this Plan to the contrary, the
amount of a Participant's Total Bonus Payout which shall be deferred shall be
reduced and offset by an amount so that (i) plus (ii) equals the deferral which
would have been made in the absence of the offset where (i) equals the actual
deferral made after the offset and (ii) equals (A) 6%
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times (B) the Participant's Total Bonus Payment minus the actual deferral made
after the offset.
3.3 Discontinuance of Offset.
The offsets to a Participant's deferral under Sections 3.1(b) and 3.2(b)
shall be discontinued during a Plan Year after the total amount of the offsets
made under Sections 3.1(b) and 3.2(b) in the aggregate for the Plan Year equals
6% of the dollar limit described in Internal Revenue Code Section 401(a)(17)
(adjusted for cost of living increases). If the Section 401(a)(17) limit is
adjusted during the middle of a Plan Year, the offsets shall be resumed if
necessary so that the total amount of the offsets for the Plan Year equals 6% of
the dollar limit under Code Section 401(a)(17) as in effect at the end of the
Plan Year.
3.4 Crediting to Deferral Contributions Account.
Amounts equal to the amounts of compensation deferred under Section 3.1
and/or Section 3.2 will be credited to the Participant's Deferral Contributions
Account under the Plan as of the last day of the calendar quarter in which such
amounts would have been paid to the Participant but for the Participant's
deferral election.
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ARTICLE IV
Employer Matching Contributions
4.1 Amount.
For each pay period the Employer shall credit to each Participant's
Employer Matching Contribution Account an amount equal to 50% of the
Participant's Deferral Contributions under Sections 3.1 and 3.2 above;
provided, however, that the total Employer Matching Contributions for any
pay period shall be limited so that they do not exceed (i) 3% of the
Regular Compensation and Total Bonus Payout of the Participant for such pay
period minus (ii) an amount equal to (A) times (B) where (A) is 3% and (B)
is the Participant's Regular Compensation and Total Bonus Payout for such
pay period minus the amount of his Deferral Contributions under Article III
for such pay period. The offset under clause (ii) of the preceding sentence
shall cease to be applied in pay periods after the cumulative amount of the
Participant's Regular Compensation and Total Bonus Payout minus the amount
of his Deferral Contribution under Article III for the Plan Year equals the
dollar amount described in Internal Revenue Code Section 401(a)(17), as
adjusted for cost of living increases. If the dollar limitation under
Section 401(a)(17) is adjusted during the Plan Year, the offsets under
clause (ii) above shall be resumed if necessary so that the total amount of
the offsets under clause (ii) above equal 3% of the limitation under Code
Section 401(a)(17) as in effect at the end of the Plan Year or, if less, 3%
of the Participant's Regular Compensation and Total Bonus Payout for the
Plan Year minus the amount of his Deferral Contributions under Article III
for the Plan Year.
4.2 Crediting to Employer Matching Contribution Account.
Matching Contributions under Section 4.1 shall be credited to the
Participant's Matching Contribution Account under the Plan as of the last
day of the calendar quarter in which the Deferral Contributions which are
being matched would have been paid to the Participant but for the
Participant's deferral election.
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ARTICLE V
Interest
5.1 Crediting of Interest.
A Participant's Account shall be credited with interest each quarter at a
rate equal to 80% of the Prime Rate at the Firstar Bank, Milwaukee, N.A. on the
last day of the quarter divided by four (4). Interest for a quarter shall be
credited on the last day of the quarter and shall be calculated with respect to
the Participant's beginning Account balance for the quarter. A Participant's
Account shall be credited with interest until the date payment of the
Participant's Account is completed.
5.2 Reports to Participants.
The Employer shall provide annual reports to each Participant showing (a)
the value of the Account as of the most recent June 30 Valuation Date; (b) the
amount of contributions credited by the Employer for the year ending on such
Valuation Date, (c) the amount of interest credited to the Participant's Account
and (d) the amount of distributions from the Participant's Account.
5.3 Grantor Trust Only.
Benefits under this Plan are payable solely from the general assets of the
Employer. Participants' Accounts shall be utilized solely as a device for the
measurement and determination of the amounts to be paid to Participants under
the Plan. Participant Accounts shall not constitute or be treated as a trust
fund of any kind. Title to and beneficial ownership of any assets which the
Employer may earmark to pay deferred compensation hereunder shall at all times
remain in the Employer and Participants shall have no interest in any specific
assets of the Employer by virtue of this Plan. Notwithstanding the foregoing,
the Employer intends to finance its obligation hereunder via the Trust Agreement
dated January 31, 1995 between the Employer and Johnson Heritage Trust Company
(the "Trust"), which is intended to be a grantor trust, in the event of a Change
of Control Event as defined in such Trust.
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It is the intention of all parties involved that the arrangements be unfunded
for tax purposes and for purposes of Title I of ERISA. The Trust and any assets
held by the Trust to assist it in meeting its obligations under the Plan are
intended to conform to the terms of the model trust requirements set forth in
Revenue Procedure 92-64 issued by the Internal Revenue Service.
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ARTICLE VI
Distribution
6.1 Distribution.
Except as otherwise may be provided in this Article VI, distributions of a
Participant's Account shall be made to the Participant (or the Participant's
Beneficiary in the event of the Participant's death before all amounts are paid)
in ten (10) annual installments, with the first installment to be paid in
January of the year following the Calendar Year in which the Participant
retires or attains age 62 and with subsequent installments to be paid
in each succeeding January until the Participant's Account shall be distributed
in full. The first installment shall be equal to one tenth (1/10th) of the total
amount credited to the Participant's Account as of the preceding Valuation Date
and in each subsequent year the Participant (or the Participant's Beneficiary,
in the event of the Participant's death) shall receive that fraction of the
Participant's Account, valued as of the preceding Valuation Date, of which the
numerator is 1 and the denominator is the total number of remaining installments
to be made to the Participant.
6.2 Committee Discretion to Accelerate.
Notwithstanding the above, a Participant or Beneficiary, as applicable, may
request, at least 6 months prior to the date commencement of distributions under
Section 6.1 is scheduled to begin, to have the Participant's interest in the
Participant's Account paid at an earlier date, over a shorter period or in a
single lump sum. The Committee retains the power and discretion to grant or
deny any request or to otherwise determine, absent any request, to accelerate
payments hereunder or make payment of the remainder of a Participant's Account
in a single sum (i) at any time after the Participant's termination of
employment with the Employer or (ii) following Plan termination, at any time,
whether before or after the Participant's termination of employment with the
Employer.
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6.3 Change in Law.
Notwithstanding any of the above, the Committee may direct payment of a
Participant's Account before it otherwise would be payable under this Article VI
if, based on notification from the Internal Revenue Service or a review by the
Committee in light of Internal Revenue Service guidance, the Committee
determines that a Participant has or will recognize income for federal income
tax purposes with respect to amounts that are or will be payable under the Plan
before they are to be paid. Further, the Committee may direct payment of a
Participant's Account before it otherwise would be payable and may terminate a
Participant's participation in the Plan if, based on notification from the
Department of Labor or a review by the Committee in light of Department of Labor
guidance, the Committee determines that an individual's participation in the
Plan jeopardizes the Plan's status as a plan described in Section 12.6 hereof.
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ARTICLE VII
Administration
7.1 In General.
The Committee has such powers as may be necessary to direct the general
administration of the Plan, including the powers given to it elsewhere in this
document and including (but not by way of limitation) the following powers:
(a) to construe and interpret the Plan and to make equitable adjustments
for any mistakes or errors made in the administration thereof;
(b) To prescribe such procedures, rules and regulations as it shall deem
necessary or proper for the efficient administration of the Plan or
any of its duties hereunder;
(c) to decide questions of eligibility and determine the amount, manner
and time of payment of any benefits and to direct the payment of the
same by the Employer;
(d) to prescribe the form and manner of application for any benefits
hereunder and forms to be used in the general administration hereof;
and
(e) to receive from the Employer and Participants or their Beneficiaries
such information as shall be necessary for the proper administration
of the Plan.
7.2 Committee Discretion.
The Committee has full and complete discretionary authority to determine
eligibility for benefits, to construe the terms of the Plan and to decide any
matter presented through the claims review procedure. Any final determination by
the Committee shall be binding on all parties and afforded the maximum deference
allowed by law. If challenged in court, such determination shall not be subject
to de novo review and shall not be overturned unless proven to be arbitrary and
capricious upon the evidence considered by the Committee at the time of such
determination.
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7.3 Committee Members' Conflict of Interest.
A member of the Committee who is covered hereunder may not vote or decide
upon any matter relating solely to himself or vote in any case in which his
individual right to any benefit under the Plan is particularly involved nor may
a member of the Board who is covered hereunder vote to amend the Plan regarding
the timing of distributions or vote with respect to direct or indirect
termination of the Plan. Decisions shall be made by remaining Committee or Board
members even if there is no quorum under normal Committee or Board rules.
7.4 Governing Law.
This Plan shall be construed in accordance with the laws of the State of
Wisconsin to the extent not preempted by the provisions of the Employee
Retirement Income Security Act of 1974 or other federal law.
7.5 Expenses.
All expenses and costs incurred in connection with the administration and
operation of the Plan shall be borne by the Employer and/or the Trust.
7.6 Minor or Incompetent Payees.
If a person to whom a benefit is payable is a minor or is otherwise
incompetent by reason of a physical or mental disability, the Committee may
cause the payments due to such person to be made to another person for the first
person's benefit without any responsibility to see to the application of such
payment. Such payments shall operate as a complete discharge of the obligations
to such person under the Plan.
7.7 Withholding.
To the extent required by law, the Employer shall withhold any taxes
required to be withheld by the federal or any state or local government from
payments made hereunder or from other amounts paid to the Participant by the
Employer. To the extent that FICA taxes are required to be withheld from the
Participant with respect to
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amounts credited under this Plan and no amounts are to be paid to the
Participant hereunder or otherwise from the Employer from which such FICA taxes
may be withheld, then the Employer shall pay such FICA taxes and the
Participant's Account hereunder shall be reduced by the amount of the FICA tax
paid.
7.8 Indemnification.
Except as otherwise provided by law, neither the Board or the Committee nor
any individual member of the Board or the Committee, nor the Employer, nor any
officer, shareholder or employee of the Employer shall be liable for any error
of judgment, action or failure to act hereunder or for any good faith exercise
of discretion, excepting only liability for gross negligence or willful
misconduct. Such individuals and entities shall be indemnified and held harmless
by the Employer against any and all claims, damages, liabilities, costs and
expenses (including attorneys' fees) arising by reason of any good faith error
of omission or commission with respect to any responsibility, duty or action
hereunder. Nothing herein contained shall preclude the Employer from purchasing
insurance to cover potential liability of one or more persons who serve in an
administrative capacity with respect to the Plan.
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ARTICLE VIII
Benefits Unfunded
The right of any individual to receive payment under the provisions of this
Plan shall be an unsecured claim against the general assets of the Employer, and
no provisions contained in this Plan, nor any action taken pursuant to this
Plan, shall be construed to give any individual at any time a security interest
in any asset of the Employer, of any affiliated company, or of the stockholders
of the Employer. The liabilities of the Employer to any individual pursuant to
this Plan shall be those of a debtor pursuant to such contractual obligations as
are created by this Plan and to the extent any person acquires a right to
receive payment from the Employer under this Plan, such right shall be no
greater than the right of any unsecured general creditor of the Employer.
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ARTICLE IX
Nonalienation of Benefits
All benefits payable hereunder are for the sole use and benefit of the
Participants and their Beneficiaries and, to the extent permitted by law, shall
be free, clear and discharged of and from, and are not to be in any way liable
for, debts, contracts or agreements, now contracted or which may hereafter be
contracted and from all claims and liabilities now or hereafter incurred by any
Participant or Beneficiary covered by this Plan. No Participant or Beneficiary
covered by this Plan shall have the right to anticipate, surrender, encumber,
alienate or assign, whether voluntarily or involuntarily, any of the benefits to
become due hereunder unto any person or person upon any terms whatsoever, and
any attempt to do so shall be void.
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ARTICLE X
Claims Procedure
10.1 Claims.
If the Participant or the Participant's Beneficiary (hereinafter refereed
to as "claimant") believes he is being denied any benefit to which he is
entitled under this Plan for any reason, he may file a written claim with the
member of the Committee designated as the claims administrator. The claims
administrator shall review the claim and notify the claimant of his decision
within 90 days of receipt of such claim, unless the claimant receives written
notice prior to the end of the 90 day period stating that special circumstances
require an extension of the time for decision. The claim administrator's
decision shall be in writing, sent by first class mail to the claimant's last
known address, and if a denial of the claim, shall contain the specific reasons
for the denial, reference to pertinent provisions of the Plan on which the
denial is based, a description of any additional information or material
necessary to perfect the claim, and an explanation of the claims review
procedure.
10.2 Review Procedure.
A claimant is entitled to request the entire Committee to review any denial
by written request to the Committee within 60 days of receipt of the denial.
Absent a request for review within the 60-day period, the claim will be deemed
to be conclusively denied. The Committee shall afford the claimant or his
authorized representative the opportunity to review all pertinent documents and
submit issues and comments in writing and shall render a review decision in
writing, all within 60 days after receipt of a request for review (provided that
in special circumstances the Committee may extend the time for decision by not
more than 60 days upon written notice to the claimant). The Committee's review
decision shall contain specific reasons for the decision and reference to the
pertinent provisions of the Plan.
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ARTICLE XI
Amendment and Termination
The Board of Directors may amend or terminate this Plan at any time;
provided, however, that no such amendment or termination shall deprive any
Participant or Beneficiary of any amounts accrued to him under this Plan prior
to the date of such amendment or termination. If this Plan is terminated, a
Participant's Account hereunder as of the date of termination shall continue to
be credited with interest under Article V and be paid in accordance with the
terms of the Plan as in effect on such date of termination (subject to the
Committee's discretion with respect to distributions, as described in Article
VI); provided, however, that no additional contributions shall be credited after
such termination. Notwithstanding any other provision of the Plan to the
contrary, the Employer shall always have the right to prospectively amend the
manner of crediting interest under the Plan.
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ARTICLE XII
Miscellaneous
12.1 No Right to Continued Employment.
Neither participation in this Plan, nor the payment of any benefit
hereunder, shall be construed as giving to the Participant any right to be
retained in the service of the Employer, or limiting in any way the right of the
Employer to terminate the Participant's employment at any time. Nor does the
participation in this Plan guarantee the Participant the right to receive any
specific amount of compensation or bonus, such amount being determined solely
under such applicable compensation or bonus arrangement as established by the
Employer.
12.2 Impact on Other Plans.
No amounts credited to any Participant under this Plan and no amounts paid
from this Plan will be taken into account as "wages", "salary", "base pay" or
any other type of compensation when determining the amount of any payment or
allocation, or for any other purpose, under any other qualified or nonqualified
pension or profit sharing plan of the Employer, except as otherwise may be
specifically provided by such plan.
12.3 Severability.
If any provisions of the Plan shall be held illegal or invalid for any
reason, said illegality or invalidity shall not affect the remaining parts of
the Plan, but this Plan shall be construed and enforced as if said illegal and
invalid provisions had never been included herein.
12.4 Gender and Number.
Masculine gender shall include the feminine, and the singular shall include
the plural, unless the context clearly indicates otherwise.
12.5 Evidence Conclusive.
The Employer, the Committee and any person or persons involved
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in the administration of the Plan shall be entitled to rely upon any
certification, statement, or representation made or evidence furnished by any
person with respect to any facts required to be determined under any of the
provisions of the Plan, and shall not be liable on account of the payment of any
monies or the doing of any act or failure to act in reliance thereon. Any such
certification, statement, representation, or evidence, upon being duly made or
furnished, shall be conclusively binding upon the person furnishing it but not
upon the Employer, the Committee or any other person involved in the
administration of the Plan. Nothing herein contained shall be construed to
prevent any of such parties from contesting any such certification, statement,
representation, or evidence or to relieve any person from the duty of submitting
satisfactory proof of any fact.
12.6 Status of Plan Under ERISA.
The Plan is intended to be an unfunded plan maintained by an Employer
primarily for the purpose of providing deferred compensation for a select group
of management or highly compensated employees, as described in Section 201(2),
Section 301(a) (3), Section 401(a) (1) and Section 4021(b) (6) of the Employee
Retirement Income Security Act of 1974, as amended.
12.7 Name and Address Changes.
Each Participant shall keep his name and address on file with the Employer
and shall promptly notify the Employer of any changes in his name or address.
All notices required or contemplated by this Plan shall be deemed to have been
given to a Participant if mailed with adequate postage prepaid thereon addressed
to him at his last address on file with the Employer. If any check in payment of
a benefit hereunder (which was mailed to the last address of the payee as shown
on the Employer's records) is returned unclaimed, further payments shall be
discontinued unless evidence is furnished that the recipient is still alive.
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