SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2)).
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Rule 14a-12
BRIGG'S & STRATTON CORPORATION
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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BRIGGS & STRATTON CORPORATION
[BRIGGS & STRATTON LOGO]
12301 WEST WIRTH STREET
WAUWATOSA, WISCONSIN 53222
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of Shareholders of BRIGGS & STRATTON CORPORATION, a
Wisconsin corporation, will be held at the Ballantyne Conference Center, 10000
Ballantyne Commons Parkway, Charlotte, North Carolina, on Wednesday, October 16,
2002, at 9:00 a.m. Eastern Daylight Time, for the following purposes:
(a) To elect three directors to serve for three-year terms expiring in
2005; and
(b) To take action on any other matters brought before the meeting
appropriate for consideration by the shareholders of a Wisconsin
corporation at an annual meeting.
By order of the Board of Directors
Wauwatosa, Wisconsin
September 17, 2002
ROBERT F. HEATH, Secretary
YOUR VOTE IS IMPORTANT TO ENSURE THAT A MAJORITY OF THE STOCK IS
REPRESENTED. YOU MAY VOTE USING THE INTERNET, BY TELEPHONE, OR BY RETURNING THE
ENCLOSED PROXY CARD IN THE ENVELOPE PROVIDED. INSTRUCTIONS FOR VOTING VIA THE
INTERNET OR BY TELEPHONE ARE INCLUDED ON YOUR PROXY CARD.
The Ballantyne Conference Center is located in Charlotte, North Carolina,
about 12 miles south of the Charlotte Airport.
PROXY STATEMENT
* * * * *
GENERAL INFORMATION
This Proxy Statement relates to the solicitation of proxies by the Board of
Directors of Briggs & Stratton to be used at the Annual Meeting of Shareholders
and any adjournments. The meeting will be held on October 16, 2002 at the
Ballantyne Conference Center, 10000 Ballantyne Commons Parkway, Charlotte, North
Carolina. Briggs & Stratton's principal executive offices are located at 12301
West Wirth Street, Wauwatosa, Wisconsin 53222. This Proxy Statement and the form
of proxy will be mailed to shareholders on or about September 17, 2002.
WHO CAN VOTE?
Shareholders of record at the close of business on August 22, 2002 are
entitled to notice of and to vote at the meeting. On August 22, 2002, Briggs &
Stratton had outstanding 21,645,984 shares of $.01 par value common stock
entitled to one vote per share.
HOW DO I VOTE?
You may vote in person or by properly appointed proxy. You may cast your
vote by returning your signed and dated proxy card, or by voting electronically.
You have the option to vote by proxy via the Internet or toll-free touch-tone
telephone.
Instructions to vote electronically are listed on your proxy card or on the
information forwarded by your bank or broker. These procedures are designed to
authenticate your identity as a shareholder and to allow you to confirm that
your instructions have been properly recorded. If you vote over the Internet,
you may incur costs that you will be responsible for such as telephone and
Internet access charges. The Internet and telephone voting facilities will close
at 5:00 p.m. Eastern Daylight Time on October 15, 2002.
You may revoke your proxy by voting in person at the meeting, by written
notice to the Secretary, or by executing and delivering a later-dated proxy via
the Internet, or by telephone or by mail, prior to the closing of the polls.
Attendance at the meeting does not in itself constitute revocation of a proxy.
All shares entitled to vote and represented by properly completed proxies timely
received and not revoked will be voted as you direct. If no direction is given,
the proxies will be voted as the Board of Directors recommends.
HOW ARE VOTES COUNTED?
A majority of the votes entitled to be cast on each matter, represented
either in person or by proxy, will constitute a quorum with respect to the
matter. If a quorum exists, the affirmative vote of a majority of the votes
represented at the meeting is required for the election of directors. A vote
withheld counts toward the quorum requirement and has the effect of a vote
against the director nominee or nominees. The Inspectors of Election appointed
by the Board of Directors count the votes and ballots.
WHO PAYS FOR THIS PROXY SOLICITATION?
Briggs & Stratton pays for the cost of solicitation of proxies.
Solicitation is made primarily by mail. Some solicitation may be made by regular
Briggs & Stratton employees, without additional compensation, by telephone,
facsimile, or other means of communication, or in person. In addition, Briggs &
Stratton has retained Innisfree M&A Incorporated to assist in its proxy
solicitation efforts, at a fee anticipated not to exceed $9,000 plus reasonable
out-of-pocket expenses.
WHAT IF OTHER MATTERS COME UP AT THE ANNUAL MEETING?
The matters described in this proxy statement are the only matters we know
will be voted on at the annual meeting. If other matters are properly presented
at the meeting, the proxy holders will vote your shares as they see fit.
1
ELECTION OF DIRECTORS
The Board of Directors of Briggs & Stratton is divided into three classes.
The term of office of each class ends in successive years. Three directors are
to be elected to serve for a term of three years expiring in 2005. Six directors
will continue to serve for the terms designated in the following General
Information Table. Peter A. Georgescu has chosen to retire as a director and
will not stand for reelection at the Annual Meeting. We thank Mr. Georgescu for
his many years of distinguished service to our Board of Directors. Brian C.
Walker has agreed to stand for election at the Annual Meeting in the class of
directors whose terms expire in 2005. All directors are elected subject to the
Bylaw restriction that they may not serve beyond the Annual Meeting following
attainment of age 70.
The proxies received in response to this solicitation will be voted for the
election of the nominees named below. If any nominee is unable to serve, the
proxies may be voted for a substitute nominee selected by the Board of
Directors.
DIRECTOR COMPENSATION
Each nonemployee director of Briggs & Stratton receives an annual retainer
fee of $20,000 and an annual award of 200 shares of Briggs & Stratton common
stock, a fee of $1,500 for each Board or Committee meeting attended, and a fee
of $250 for participating in any written consent resolution.
Under the Deferred Compensation Plan for Directors, nonemployee directors
may elect to defer receipt of all or a portion of their directors' fees until
any date but no later than the year in which the director attains the age of 71
years. Participants may elect to have cash deferred amounts either: (1) credited
with interest quarterly at 80% of the prevailing prime rate or (2) converted
into common share units, based on the deferral date closing price of Briggs &
Stratton's common stock. Shares of Briggs & Stratton common stock deferred will
be credited to a common stock account. Any balance in either the common stock
account or the common share unit account will be credited with an amount
equivalent to any dividend paid on Briggs & Stratton's common stock, which will
be converted into additional common share units. The balance in the common stock
account will be distributed in shares of Briggs & Stratton common stock. Common
share units may be distributed in cash or stock at the election of the
directors. All other distributions will be paid in cash. Nonemployee directors
are also provided with $150,000 of coverage under Briggs & Stratton's Business
Travel Accident Plan while on corporate business.
Nonemployee directors participate in a Director's Leveraged Stock Option
Plan (the "Plan"). In general, the Plan is structured so that each nonemployee
director may receive a grant of nonqualified stock options ("LSOs"). The number
of LSOs is to be determined by reference to the Company Performance Factor
achieved under the Economic Value Added Incentive Compensation Plan ("EVA(R)
Plan"). When performance reaches target under the EVA Plan, each nonemployee
director will be awarded options to purchase 2,000 shares. Performance exceeding
target will result in additional shares granted on a sliding scale. Performance
less than target may result in no option grants. The LSOs are premium priced
with the exercise price equal to the exercise price for LSOs granted under the
LSO Program for Senior Executives of Briggs & Stratton and have the same vesting
provisions and expiration terms. The Director's LSO Plan is structured so that a
fair return must be provided to Briggs & Stratton's shareholders before the
options become valuable. There were no LSOs granted to nonemployee directors for
fiscal 2002.
Nonemployee directors are encouraged to use Company products to enhance
their understanding and appreciation of the Company's business. Directors may
receive up to $10,000 annually of Company products and products powered by the
Company's engines and motors. The value of the products is included in the
directors' taxable income, and the Company reimburses directors for applicable
tax liability associated with the receipt of products.
EVA(R) is a registered trademark of Stern Stewart & Co.
2
GENERAL INFORMATION ABOUT THE NOMINEES AND DIRECTORS
YEAR FIRST
BECAME A
NAME, AGE, PRINCIPAL OCCUPATION FOR PAST FIVE YEARS AND DIRECTORSHIPS DIRECTOR
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NOMINEES FOR ELECTION AT THE ANNUAL MEETING (CLASS OF 2005):
- ------------------------------------------------------------
MICHAEL E. BATTEN, 62 (2) (4) 1984
Chairman and Chief Executive Officer of Twin Disc,
[PHOTO] Incorporated, manufacturer of power transmission equipment.
Director of Twin Disc, Incorporated, Sensient Technologies
Corporation and Walker Forge, Inc.
JAY H. BAKER, 68 (1) (2) 1999
Retired. President of Kohl's Corporation, an operator of
[PHOTO] family oriented, specialty department stores, until 2000.
Director of Kohl's Corporation.
BRIAN C. WALKER, 40 --
President, Herman Miller, N.A., a global provider of office
[PHOTO] furniture and services. President since 1999; previously Chief
Financial Officer. Director of The Brown Corporation of
America, Inc.
INCUMBENT DIRECTORS (CLASS OF 2004):
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EUNICE M. FILTER, 61 (1) (4) 1997
Retired Vice President, Treasurer and Secretary of Xerox
[PHOTO] Corporation, a manufacturer of office equipment. Director
of LaBranche & Co., Inc.
DAVID L. BURNER, 63 (2) (4) 2000
Chairman and Chief Executive Officer of Goodrich Corporation,
an aircraft systems and services company. Chairman and Chief
[PHOTO] Executive Officer since 1997 and President since 1996. Director
of Progress Energy, Inc., Milacron Inc., Lance, Inc. and
Goodrich Corporation.
FREDERICK P. STRATTON, JR., 63 (3) 1976
Chairman of the Board of Briggs & Stratton; also Chief
[PHOTO] Executive Officer until June 30, 2001. Director
of Bank One Corporation, Midwest Express Holdings, Inc., Weyco
Group, Inc., Wisconsin Electric Power Company, Wisconsin Energy
Corporation and Wisconsin Gas Company.
FOOTNOTES (1), (2), (3) AND (4) ARE ON PAGE 4.
3
YEAR FIRST
BECAME A
NAME, AGE, PRINCIPAL OCCUPATION FOR PAST FIVE YEARS AND DIRECTORSHIPS DIRECTOR
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INCUMBENT DIRECTORS (CLASS OF 2003):
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ROBERT J. O'TOOLE, 61 (2) (4) 1997
Chairman of the Board, President and Chief Executive Officer,
[PHOTO] A.O. Smith Corporation, a diversified manufacturer whose major
products include electric motors and water heaters. Director of
Factory Mutual Insurance Co., Marshall & Ilsley Corporation,
A.O. Smith Corporation and Sensient Technologies.
JOHN S. SHIELY, 50 (3) 1994
President and Chief Executive Officer of Briggs & Stratton
[PHOTO] since July 1, 2001; previously President and Chief Operating
Officer. Director of Marshall & Ilsley Corporation and
Quad/Graphics, Inc.
CHARLES I. STORY, 48 (1) (3) 1994
President and Chief Executive Officer, INROADS, Inc., an
international non-profit training and development organization
[PHOTO] which prepares talented minorities for careers in business and
engineering. Director of INROADS, Inc. and ChoicePoint Inc.
Advisory Director of AmSouth Bank.
COMMITTEE MEMBERSHIP: (1) NOMINATING AND GOVERNANCE, (2) COMPENSATION, (3) EXECUTIVE, (4) AUDIT.
The Board of Directors held six meetings in fiscal 2002. All of the
directors attended over 75% of the meetings of the Board and the Committees upon
which they serve.
The Nominating and Governance Committee, composed of outside directors, is
chaired by Peter A. Georgescu, who is retiring from the Board. The Committee:
- proposes to the Board of Directors a slate of nominees for election by
the shareholders at the Annual Meeting and recommends prospective
director candidates in the event of the resignation, death or retirement
of directors or change in Board composition requirements;
- reviews candidates recommended by shareholders for election to the Board
of Directors;
- develops plans regarding the size and composition of both the Board of
Directors and Committees; and
- monitors and makes recommendations to the Board of Directors concerning
corporate governance issues.
The Committee will consider candidates for the Board of Directors
recommended by a shareholder who submits a recommendation in writing to the
Secretary of Briggs & Stratton stating the shareholder's name and address, the
name and address of the candidate, and the qualifications of and other detailed
background information regarding the candidate. All letters suggesting
candidates must be received by the Secretary of Briggs & Stratton at its
principal executive offices on or before May 1 of the year of the Annual Meeting
in which the candidate's nomination would be voted upon.
Any direct nominations by shareholders for the Board of Directors must be
made in accordance with the advance written notice requirements of Briggs &
Stratton's Bylaws. A copy of the Bylaws may be obtained from the Secretary of
Briggs & Stratton. For consideration at the 2003 Annual Meeting, nominations
must be received by the Secretary no earlier than July 5, 2003 and no later than
July 30, 2003.
The Nominating and Governance Committee held four meetings during fiscal
2002.
4
The Compensation Committee, chaired by Mr. O'Toole, is composed of outside
directors. This Committee:
- reviews the compensation and benefits provided to executive officers and
makes recommendations to the Board of Directors as to salary levels and
benefits;
- reviews and recommends to the Board of Directors the adoption or
amendment of compensation and benefit plans and programs maintained for
the executive officers and other key employees;
- administers the Company's Stock Incentive Plan and Economic Value Added
Incentive Compensation Plan;
- reviews the Company's management succession plan; and
- prepares an annual report on executive compensation.
The Compensation Committee held six meetings during fiscal 2002.
The Executive Committee is authorized to exercise the authority of the
Board of Directors in the management of the business and the affairs of Briggs &
Stratton between meetings of the Board, except as provided in the Bylaws. The
Executive Committee held one meeting during fiscal 2002.
The Audit Committee, chaired by Mr. Batten, is composed of outside
directors. The Audit Committee's primary duties and responsibilities are to:
- monitor the integrity of the financial statements of Briggs & Stratton
and review with the accountants the audited financial statements and
their report;
- make recommendations to the Board of Directors regarding the engagement
of independent public accountants to audit the books and accounts of
Briggs & Stratton;
- oversee the independence and performance of Briggs & Stratton's internal
and external auditors;
- review and approve non-audit services performed by the independent public
accountants;
- review the accountants' recommendations on accounting policies and
internal controls;
- review internal accounting and auditing procedures; and
- monitor Briggs & Stratton's compliance with legal and regulatory
requirements.
The Audit Committee held five meetings during fiscal 2002.
5
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors consists of four outside
directors and acts under a written Audit Committee Charter adopted by the Board
of Directors. Each of the members of the Audit Committee is independent, as
defined by the Audit Committee Charter and the listing standards of the New York
Stock Exchange. The Audit Committee held five meetings in fiscal 2002.
Management has the primary responsibility for the financial statements, the
reporting process and assurance for the adequacy of controls. Briggs &
Stratton's independent auditors are responsible for expressing an opinion on the
conformity of Briggs & Stratton's audited financial statements to generally
accepted accounting principles. The Audit Committee is responsible for
monitoring and overseeing these processes on behalf of the Board of Directors.
In this context, the Audit Committee has reviewed and discussed Briggs &
Stratton's audited financial statements with management and Deloitte & Touche
LLP, the Company's independent auditors. The Audit Committee has discussed with
the independent auditors the matters related to the conduct of the audit
required to be discussed by Statement on Auditing Standards No. 61, as amended.
The Audit Committee also discussed with the independent auditors the quality and
adequacy of the Company's internal controls.
In addition, the Audit Committee has received from Deloitte & Touche LLP
the written disclosures of all relationships between Briggs & Stratton and
Deloitte & Touche LLP that may bear on independence and the letter required by
Independence Standards Board Standard No. 1, "Independence Discussions with
Audit Committees" and has discussed with that firm its independence.
In reliance on these reviews and discussions, the Audit Committee
recommended to the Board of Directors that the audited financial statements be
included in the Company's Annual Report on Form 10-K for the fiscal year ended
June 30, 2002 for filing with the Securities and Exchange Commission.
During fiscal year 2002, Briggs & Stratton retained Deloitte & Touche LLP
to provide services for which it billed the following fees:
Financial Information Systems
Audit Fees Design and Implementation Fees All Other Fees
- ---------- ------------------------------ --------------
$142,000 none $62,563
The category of "all other fees" consists of services provided for
litigation support ($35,063) and benefit plan consulting ($27,500). The Audit
Committee has considered whether the independent auditors' provision of services
other than audit services is compatible with maintaining auditor independence.
Submitted by the Audit Committee of the Board of Directors
Michael E. Batten, Chairman
Robert J. O'Toole
Eunice M. Filter
David L. Burner
6
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table presents the names of persons known to Briggs &
Stratton to be the beneficial owners of more than 5% of the outstanding shares
of its common stock.
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NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
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Perkins, Wolf, McDonnell & Company 3,200,120 (a) 14.8%
310 South Michigan Avenue, Suite 2600
Chicago, Illinois 60604
Capital Group International, Inc. 1,436,100 (b) 6.6%
11100 Santa Monica Blvd., Suite 1500
Los Angeles, California 90025
Capital Guardian Trust Co. 1,374,900 (c) 6.4%
11100 Santa Monica Blvd., Suite 1500
Los Angeles, California 90025
Snyder Capital Management, L.P. 1,277,850 (d) 5.9%
350 California Street, Suite 1460
San Francisco, California 94104
Artisan Partners Limited Partnership 1,189,095 (e) 5.5%
1000 N. Water Street, Suite 1770
Milwaukee, Wisconsin 53202
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(a) Perkins, Wolf, McDonnell & Company reports that as of July 31, 2002 it
had sole voting power and sole dispositive power with respect to 35,395 shares
and shared voting power and shared dispositive power with respect to 3,164,725
shares.
(b) Capital Group International, Inc. reports that as of December 31, 2001
it had sole dispositive power with respect to 1,436,100 shares. This amount
includes 1,374,900 shares held by Capital Guardian Trust Co., which are also
reported on this table under Capital Guardian Trust Co.
(c) Capital Guardian Trust Co. reports that as of December 31, 2001 it had
sole dispositive power with respect to 1,374,900 shares.
(d) Snyder Capital Management, L.P. reports that as of June 30, 2002 it had
sole voting power with respect to 41,300 shares, shared voting power on
1,136,950 shares and no voting power on 99,600 shares.
(e) Artisan Partners Limited Partnership reports that as of June 30, 2002
it had shared voting and investment power of 1,189,095 shares.
This beneficial ownership information is based on information furnished by
the beneficial owners as of the date set forth above in the footnotes.
Beneficial ownership is determined in accordance with Rule 13d-3 under the
Securities Exchange Act of 1934, as amended, for purposes of this Proxy
Statement. It is not necessarily to be construed as beneficial ownership for
other purposes.
7
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the beneficial ownership of shares of common
stock of Briggs & Stratton by each director, nominee and named executive
officer, and by all directors and executive officers as a group, as of August
22, 2002.
NATURE OF BENEFICIAL OWNERSHIP
------------------------------
TOTAL NO. SOLE SHARED SOLE
OF SHARES PERCENT VOTING AND VOTING AND VOTING
BENEFICIALLY OF INVESTMENT INVESTMENT POWER
DIRECTORS AND EXECUTIVE OFFICERS OWNED CLASS POWER POWER ONLY
- -------------------------------- --------- ----- --------- --------- -------
Jay H. Baker 2,400 * 500 1,900 0
Michael E. Batten 5,400 (a) * 5,400 0 0
James E. Brenn 303,723 (a)(b) 1.4 31,240 268,796 3,687
David L. Burner 400 (c) * 400 0 0
Eunice M. Filter 5,788 (a)(c) * 5,788 0 0
Peter A. Georgescu 6,800 (a)(c) * 4,400 2,400 0
Michael D. Hamilton 53,343 (a) * 48,910 0 4,433
Robert J. O'Toole 6,500 (a) * 6,500 0 0
Thomas R. Savage 32,697 (a) * 31,290 0 1,407
John S. Shiely 423,839 (a)(d) 1.9 126,570 294,000 3,269
Charles I. Story 5,500 (a) * 4,500 1,000 0
Frederick P. Stratton, Jr. 1,185,615 (a)(b)(d) 5.3 479,210 699,152 7,253
Brian C. Walker 0 * 0 0 0
All directors and executive officers
as a group (25 persons including
the above named persons) 1,657,963 (a)(b)(c)(d) 7.4 904,492 715,565 37,906
*Less than 1%.
(a) Includes shares issuable pursuant to stock options exercisable within 60
days for Mr. Batten (4,000 shares), Mr. Brenn (29,240 shares), Ms. Filter
(4,000 shares), Mr. Georgescu (4,000 shares), Mr. Hamilton (43,530 shares),
Mr. O'Toole (4,000 shares), Mr. Savage (30,090 shares), Mr. Shiely (93,570
shares), Mr. Story (4,000 shares), Mr. Stratton (439,210 shares), and all
directors and executive officers as a group (822,600 shares).
(b) Includes 259,200 shares in the Briggs & Stratton Retirement Plan. Mr.
Stratton and Mr. Brenn share beneficial ownership of these shares through
joint voting and investment power.
(c) Does not include phantom stock units acquired through deferral of director
fees under the Deferred Compensation Plan for the following Directors: Mr.
Burner - 1,747; Ms. Filter - 24; and Mr. Georgescu - 2,466.
(d) Includes 294,000 shares in the Briggs & Stratton Corporation Foundation. Mr.
Stratton and Mr. Shiely share beneficial ownership through joint voting and
investment power.
This beneficial ownership information is based on information furnished by
the directors and executive officers. Beneficial ownership is determined in
accordance with Rule 13d-3 under the Exchange Act, for purposes of this Proxy
Statement. It is not necessarily to be construed as beneficial ownership for
other purposes.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the directors
and certain officers of Briggs & Stratton to file reports of their ownership of
Briggs & Stratton common stock and of changes in such ownership with the
Securities and Exchange Commission and the New York Stock Exchange. Based on the
information provided by the reporting persons, all applicable reporting
requirements for fiscal 2002 were complied with in a timely manner with the
exception of a late Form 4 filing for Hugo A. Keltz to report a single
transaction.
8
PERFORMANCE GRAPH
The chart below is a comparison of the cumulative return over the last five
fiscal years had $100 been invested at the close of business on June 30, 1997 in
each of Briggs & Stratton common stock, the Standard & Poor's (S&P) Smallcap 600
Index and the S&P Machinery Index.
FIVE YEAR CUMULATIVE TOTAL RETURN COMPARISON*
BRIGGS & STRATTON VERSUS PUBLISHED INDICES
[LINE GRAPH]
6/97 6/98 6/99 6/00 6/01 6/02
---- ---- ---- ---- ---- ----
- - Briggs & Stratton 100 77 121 74 93 88
- - S&P Smallcap 600 100 119 121 139 154 175
x S&P Machinery (diversified) 100 108 128 100 112 124
* Total return calculation is based on compounded monthly returns with
reinvested dividends.
COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
Briggs & Stratton's Compensation Committee consists of four outside
directors responsible for considering and approving compensation arrangements
for senior management of Briggs & Stratton, including Briggs & Stratton's
executive officers and the chief executive officer. The objectives of the
Committee in establishing compensation arrangements for senior management are:
(1) to attract and retain key executives who are important to the continued
success of Briggs & Stratton and its operational units; and (2) to provide
strong financial incentives, at reasonable cost to the shareholders, for senior
management to enhance the value of the shareholders' investment.
The primary components of Briggs & Stratton's executive compensation
program are (1) base salary, (2) incentive compensation bonus and (3) incentive
stock options.
The Committee believes that:
- Briggs & Stratton's incentive plans provide very strong incentives for
management to increase shareholder value;
- Briggs & Stratton's pay levels are appropriately targeted to attract and
retain key executives; and
- Briggs & Stratton's total compensation program is a cost-effective
strategy to increase shareholder value.
9
BASE SALARY
The Committee reviews officers' base salaries annually. Salaries are based
on level of responsibility and individual performance. It is the Committee's
objective that base salary levels, in the aggregate, be at or modestly above
competitive salary levels. A competitive salary level is the average for similar
responsibilities in similar companies. In setting fiscal 2002 base salaries, the
Committee reviewed compensation survey data provided by its outside consultant,
Hewitt Associates, for a Comparator Group of companies in the general sales
dollar size range and broad industry sector as Briggs & Stratton. This group is
not the same group of companies included in the S&P Machinery Index. The
Committee was satisfied that the salary levels set would achieve the Committee's
objective. As a result of this process, Mr. Shiely, as Chief Executive Officer,
received a base annual salary of $664,666 in fiscal 2002.
INCENTIVE COMPENSATION BONUS
Briggs & Stratton maintains an Economic Value Added ("EVA") Incentive
Compensation Plan (the "EVA Plan"). The purpose of the EVA Plan is to provide
incentive compensation to key employees, including all employee executive
officers, in a form relating financial reward to an increase in the value of
Briggs & Stratton to its shareholders. In general, EVA is net operating profit
after taxes, less a capital charge. The capital charge is intended to represent
the return expected by the providers of the firm's capital and is the weighted
average cost of (1) equity capital based on a 10-year Treasury Bond yield plus
the product of the average equity risk premium and the business risk index for
Briggs & Stratton, and (2) debt capital equal to actual after-tax debt cost. EVA
improvement is the financial performance measure most closely correlated with
increases in shareholder value.
Under the EVA Plan in effect for fiscal 2002, the Accrued Bonus for a
participant in any fiscal year is equal to the aggregate of 50% of the Company
Performance calculation (Base Salary x Target Incentive Award x Company
Performance Factor) plus 50% of the Individual Performance calculation (Base
Salary x Target Incentive Award x Individual Performance Factor). The intent of
the Plan is to reward executives based on their ability to continuously improve
the amount of EVA earned on behalf of shareholders. For all of the executives
named in the Summary Compensation Table the Committee determined that the
Individual Performance Factor would be the same as the Company Performance
Factor. Individual target incentive awards under the Plan ranged from 20% to
100% of base compensation for fiscal 2002. For the same year, Mr. Shiely's
individual target incentive award was 100%. The Company Performance Factor for
the fiscal year was 0.23; and therefore, Mr. Shiely received a bonus of
$152,873. Beginning with fiscal 2003, the Committee recommended and the Board of
Directors approved changing the EVA Plan so that the Company Performance Factor
will be 30% of an individual's Accrued Bonus and the Individual Performance
Factor will be 70% of the Accrued Bonus, with no more than 15% of the Accrued
Bonus attributable to Non-Quantifiable Individual Performance Factors.
The Company Performance Factor is based on the amount of improvement or
deterioration in EVA. If the annual EVA is in excess of the Target EVA, the
Company Performance calculation will produce an amount in excess of the Target
Incentive Award. If the annual EVA is less than the Target EVA, the Company
Performance calculation will produce an amount less than the Target Incentive
Award. There is no cap and no floor on the accrued bonus. The Target EVA is the
average of the Target EVA and Actual EVA for the prior Plan year plus an
Expected Improvement. For Plan year 2002, Expected Improvement was $2 million.
For fiscal 2002 the Target EVA was $6.8 million.
The Individual Performance Factor is determined by the executive to whom
the participant reports, subject to approval by the Committee and is the average
(or weighted average) of one or more quantifiable or non-quantifiable factors
called Supporting Performance Factors. Supporting Performance Factors represent
an achievement percentage continuum that generally ranges from 50% to 150% of
the individual target award opportunity and will be enumerated from .5 to 1.5
based on this range. If approved by the Committee, Supporting Performance
Factors which are the same as the Company Performance Factor or are based on
divisional EVA are uncapped.
10
The EVA bonus plan provides the powerful incentive of an uncapped bonus
opportunity, but also uses a "Bonus Bank" feature to ensure that extraordinary
EVA improvements are sustained before extraordinary bonus awards are paid out.
The Bonus Bank applies to Senior Executives as designated by the Committee under
the Plan. All of the employee executive officers, including those named in the
Summary Compensation Table, were designated Senior Executives for fiscal 2002.
Each year, any accrued bonus in excess of 125% of the target bonus award is
added to the outstanding Bonus Bank balance. The bonus paid is equal to the
accrued bonus for the year, up to a maximum of 125% of the target bonus, plus
33% of the new Bonus Bank balance. A Bonus Bank account is considered at risk
given that in any year the accrued bonus is negative, the negative bonus amount
is subtracted from the outstanding Bonus Bank balance. Extraordinary EVA
improvements must be sustained for several years to ensure full payout of the
accrued bonus. In the event the outstanding Bonus Bank balance at the beginning
of the year is negative, the bonus paid is limited to the accrued bonus up to a
maximum of 75% of the target bonus with the remainder of the accrued bonus
offsetting the negative balance in the Bonus Bank. On termination of employment
due to death, disability or retirement, the available balance in the Bonus Bank
will be paid to the terminating executive or his designated beneficiary or
estate. Executives who voluntarily leave to accept employment elsewhere or who
are terminated for cause will forfeit any positive available balance. An
executive is not expected to repay negative balances upon termination or
retirement.
STOCK INCENTIVE PLAN
In 1990, the shareholders approved Briggs & Stratton's Stock Incentive Plan
("Incentive Plan"). The Incentive Plan authorizes the Committee to grant to
officers and other key employees stock incentive awards in the form of one or
any combination of the following: stock options, stock appreciation rights,
deferred stock, restricted stock and stock purchase rights. In early 1993, the
Committee worked with a consultant to adopt a method of granting options which
more closely aligns financial reward to optionees with the long-term performance
of Briggs & Stratton.
Since fiscal 1994, the sole form of options granted under the Incentive
Plan has been leveraged stock options (LSOs). The LSOs granted are either
Incentive Stock Options or Non-Qualified Stock Options under the Stock Option
part of the Incentive Plan. At the 1999 Annual Meeting, shareholders approved an
amended and restated Incentive Plan that increased the shares authorized for
issuance under the Plan and provided that all stock options granted under the
Plan will continue to be premium priced LSOs. Also in 1999, the Committee
increased the term of future LSO grants from 5 to 7 years. In 2002, the term of
LSOs to be granted with respect to fiscal 2003 and subsequent years was further
increased by the Committee to 10 years and the premium price of LSOs was set at
3 years from the date of grant, based on a report prepared by Hewitt Associates
concerning LSOs. Options granted will continue to be exercisable after 3 years.
The maximum number of LSOs to be granted each year is 600,000. The maximum
number of LSOs that may be granted cumulatively under the LSO Program is
4,539,986. If the calculation produces more than 600,000 LSOs in any year, LSOs
granted to all Senior Executives for that year will be reduced pro-rata based on
proportionate Total Bonus Payouts under the EVA Plan. The amount of reduction is
carried forward to subsequent years and invested in LSOs to the extent the
annual limitation is not exceeded in future years.
The calculation of the number of options granted to each executive and the
method of determining their exercise price, are described below. These LSOs
provide an option grant that simulates a stock purchase with 10:1 leverage.
Because the LSOs granted for 2002, referred to below, have a premium exercise
price and a term of seven years, the current Black-Scholes value of these
options is only 27.7% of the grant date stock price.
The number of LSOs granted to a Senior Executive is determined by dividing
the Total Bonus Payout and any uninvested Total Bonus Payout dollars carried
forward from the prior year by 10% of the fair market value of Briggs & Stratton
stock on the date of grant. The exercise price of the option is the product of
90% of the fair market value on the date of grant times the Estimated Annual
Growth Rate compounded over five years, which is the mid-point of the option
exercise period. The Estimated Annual Growth Rate equals the average daily
closing 10-year U.S. Treasury Bond yield for March in the year of grant plus 1%.
11
The following example illustrates the calculation of the stock option grant
for a Senior Executive who has $50,000 in Total Bonus Payout under the EVA Plan.
The number of options earned is calculated by dividing the dollars for
investment by 10% of the fair market value of Briggs & Stratton stock on the
date of grant. Assume the fair market value of Briggs & Stratton stock on the
date of grant is $38.26.
Example: NUMBER OF OPTIONS GRANTED
10% of the fair market value is $3.826
OPTIONS GRANTED is 13,068 ($50,000 / 3.826)
EXERCISE PRICE = (.9 X FAIR MARKET VALUE) X ESTIMATED ANNUAL GROWTH
RATE(5)*
6.28% is the Estimated Annual Growth Rate (5.28 plus 1%) (See
description above)
The exercise price is $46.69 (.9 x $38.26 x 1.0628(5)*)
* Raising it to the 5th power takes it to a 5-year compound growth
rate, five years being the midpoint of the 4-year exercise period.
A 3-year compound growth rate will be used for future fiscal
years.
Thus, based on this example, the fair market value of Briggs & Stratton
shares must exceed $46.69 between 3 and 7 years (or between 3 and 10 years for
options granted with respect to fiscal 2003 and subsequent years) from the date
of LSO grant to give the LSOs value to the Senior Executives.
On August 6, 2002, after publication of financial results for fiscal 2002,
the Committee granted LSOs to 19 Senior Executives. The number of LSOs granted
to Mr. Shiely was determined in the manner described above.
Section 162(m) of the Internal Revenue Code limits tax deductions for
executive compensation to $1 million, unless certain conditions are met. While
no covered executive's individual compensation exceeded this threshold in fiscal
2002, the EVA Plan and the Stock Incentive Plan are designed generally to ensure
full deductibility of compensation paid under these plans. It has been Briggs &
Stratton's policy to take reasonable steps to maintain the corporate tax
deductibility of compensation paid to executive officers.
COMPENSATION COMMITTEE:
Robert J. O'Toole, Chairman
Jay H. Baker
Michael E. Batten
David L. Burner
12
EXECUTIVE COMPENSATION
COMPENSATION SUMMARY
The table includes information for each of the last three fiscal years
concerning the compensation paid by Briggs & Stratton to Briggs & Stratton's
Chief Executive Officer and the four other most highly compensated executive
officers.
SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION
----------------------
AWARDS PAYOUTS
------ -------
ANNUAL SECURITIES
COMPENSATION (1) UNDERLYING
NAME AND FISCAL ---------------- OPTIONS/ LTIP ALL OTHER
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) SARS (#)(2) PAYOUTS ($)(3) COMPENSATION ($)(4)
- ------------------ ---- --------- -------- ----------- -------------- -------------------
J.S. Shiely 2002 $664,666 $152,873 39,960 $ 0 $28,528
- -----------
President and 2001 425,780 0 46,270 0 36,241
Chief Executive Officer 2000 396,480 442,353 77,460 26,578 21,244
F.P. Stratton 2002 306,900 70,587 0 0 31,307
- -------------
Chairman of the Board 2001 604,500 0 87,920 0 56,089
2000 558,000 830,081 147,220 61,087 41,390
T.R. Savage 2002 277,020 38,229 9,990 0 21,811
- -----------
Senior Vice President - 2001 263,400 0 22,860 0 28,131
Administration 2000 250,800 223,854 38,280 7,868 20,801
J.E. Brenn 2002 276,020 38,091 9,960 0 21,955
- ----------
Senior Vice President 2001 264,600 0 23,090 0 21,429
and Chief Financial Officer 2000 252,000 224,925 38,650 9,040 23,474
M.D. Hamilton 2002 270,530 41,490 5,420 0 29,540
- -------------
Executive Vice President 2001 258,272 0 13,290 0 36,935
and President, Briggs & 2000 251,232 251,124 22,250 18,234 28,140
Stratton, Asia
(1) Includes amounts earned in fiscal year, whether or not deferred.
(2) No SARs are outstanding. Option awards reported for fiscal 2002 were granted
August 13, 2002.
(3) Figures reflect the portion of the EVA Plan bonus bank balances paid with
respect to each fiscal year.
(4) All other compensation for fiscal 2002 for Messrs. Shiely, Stratton, Savage,
Brenn and Hamilton, respectively, includes: (i) matching contributions to
the Briggs & Stratton's Savings and Investment Plan for each named executive
officer of $5,500, $0, $5,300, $5,260 and $5,295; (ii) matching
contributions to Briggs & Stratton's Key Employee Savings and Investment
Plan for each named executive officer of $13,678, $6,657, $3,211, $3,181 and
$3,016; and (iii) total premiums of $9,350, $24,650, $13,300, $13,514 and
$21,229 paid by Briggs & Stratton for the benefit of the named executive
officers under Briggs & Stratton's split dollar Executive Life Insurance
Plan.
13
STOCK OPTIONS
The Stock Incentive Plan approved by shareholders provides for the granting
of stock options with respect to Briggs & Stratton common stock. The tables
contain additional information on stock options.
The methodology used in determining the number of grants awarded and other
terms and conditions of the grants are found in the Compensation Committee
Report on Executive Compensation. Option awards reported for fiscal 2002 were
granted effective August 13, 2002. Options become exercisable August 13, 2005.
Option awards are intended to qualify as "incentive stock options" to the extent
permitted under the Internal Revenue Code of 1986, as amended. Any options not
meeting the requirements for incentive stock options will be treated as
non-qualified stock options.
OPTION/SAR GRANTS FOR LAST FISCAL YEAR
GRANT DATE
INDIVIDUAL GRANTS VALUE
- -------------------------------------------------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE OR BASE GRANT DATE
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION PRESENT
NAME GRANTED (#) FISCAL YEAR ($ / SH) DATE VALUE ($)
- ---- ----------- ----------- -------- ---- ---------
J.S. Shiely ........... 39,960 19.4% $46.69 8/13/09 $423,976
F.P. Stratton ......... 0 -- -- -- --
T.R. Savage ........... 9,990 4.8 46.69 8/13/09 105,994
J. E. Brenn ........... 9,960 4.8 46.69 8/13/09 105,676
M.D. Hamilton ......... 5,420 2.6 46.69 8/13/09 57,506
The estimated grant date present value reflected in the Option/SAR table is
determined using the Black-Scholes model. The material assumptions and
adjustments incorporated in the Black-Scholes model in estimating the value of
the options reflected in the table include the following:
- An exercise price on the option of $46.69.
- Fair market value of the common stock on the date of grant of $38.26.
- An option term of 7 years.
- An interest rate of 4.30 percent that represents the interest rate on a
U.S. Treasury security on the date of grant with a maturity date
corresponding to that of the option term.
- An annualized volatility of 36.15% (utilizing 36 months of historical
daily stock prices).
- Dividends at the rate of $0.32 per share representing the annualized
dividends of $1.26 (3.29% yield) paid with respect to a share of common
stock at the date of grant.
The ultimate values of the options will depend on the future market price
of Briggs & Stratton stock, which cannot be forecast with reasonable accuracy.
The actual value, if any, an optionee will realize upon exercise of an option
will depend on the excess of the market value of Briggs & Stratton common stock
over the exercise price on the date the option is exercised.
If there is a "change in control" of Briggs & Stratton, as defined in the
Incentive Plan, any outstanding stock options which are not then exercisable
will become fully exercisable and vested. Upon a change in control, optionees
may elect to surrender all or any part of their stock options and receive a per
share amount in cash equal to the excess of the "change in control price" over
the exercise price of the stock option. If an optionee's employment is
terminated at or following a change in control (other than by death, disability,
or retirement), the exercise periods of an optionee's stock options will be
extended to the earlier of six months and one day from the date of employment
termination or the options' respective expiration dates. No SARs were granted.
14
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES*
NUMBER OF SECURITIES VALUE OF
UNDERLYING UNEXERCISED UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
SHARES ACQUIRED VALUE AT FISCAL YEAR END (#) AT FISCAL YEAR END ($)
NAME ON EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- --------------- ------------ ----------- ------------- ----------- -------------
J.S. Shiely ..... 12,818 $257,749 69,730 216,980 $0 $0
F.P. Stratton ... 13,200 257,269 497,690 0 0 0
T.R. Savage ..... 0 0 20,240 88,800 0 0
J.E. Brenn ...... 739 13,742 20,940 88,940 0 0
M.D. Hamilton ... 0 0 46,580 57,820 0 0
* No SARs are outstanding. Options at fiscal year end include options granted
August 13, 2002 for fiscal 2002.
LONG-TERM INCENTIVE COMPENSATION
As described in more detail in the Compensation Committee Report on
Executive Compensation, the EVA Plan requires that accrued bonuses payable to
Senior Executives in excess of 125% of their target bonus be banked. This
occurred in August 2000 for fiscal 2000. In any year the accrued bonus is
negative, the negative bonus amount is subtracted from the outstanding bonus
bank balance. This occurred in August 2001 for fiscal 2001, when the negative
amounts were subtracted from the bonus bank for each of the named executive
officers, leaving a negative accrued bonus bank balance. Under the EVA Plan,
because the bonus paid in August 2002 for fiscal 2002 was less than 75% of the
target bonus, the negative accrued bonus bank balances remain and are carried
forward to fiscal 2003.
LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR
ESTIMATED FUTURE PAYOUTS (PAYBACKS) UNDER NON-STOCK
PRICE-BASED PLANS
------------------------------------------------------
AMOUNTS BANKED
NAME (FORFEITED) ($) MINIMUM ($) MAXIMUM ($)
- -----------------------------------------------------------------------------------------------------------
J.S. Shiely $0 $(173,022) $0
F.P. Stratton 0 (308,015) 0
T.R. Savage 0 (94,761) 0
J.E. Brenn 0 (92,868) 0
M.D. Hamilton 0 (82,265) 0
RETIREMENT PLAN
Briggs & Stratton maintains a defined benefit retirement plan (the
"Retirement Plan") covering all executive officers and substantially all other
Milwaukee employees. Under the Retirement Plan non-bargaining unit employees
receive an annual pension payable on a monthly basis at retirement equal to 1.6%
of the employee's average of the highest five years' compensation of the last
ten calendar years of service prior to retirement multiplied by the number of
years of credited service. This amount is offset by 50% of Social Security. The
Social Security offset is prorated if years of credited service are less than
30.
Executive officers participate in an unfunded program that supplements
benefits under the Retirement Plan. Under this program executive officers are
provided with additional increments of 0.50 of 1% of compensation per year of
credited service over that presently payable under the Retirement Plan to
non-bargaining unit employees. In no event will a pension paid under the above
described plans to a non-bargaining unit employee exceed 70% of the employee's
average monthly compensation.
A trust has been established for deposit of the aggregate present value of
the benefits described above for executive officers upon the occurrence of a
change in control of Briggs & Stratton. The trust would not be considered
funding the benefits for tax purposes.
15
The following table shows total estimated annual benefits from funded and
unfunded sources generally payable to executive officers upon normal retirement
at age 65 at specified compensation and years of service classifications. These
are calculated on a single-life basis and adjusted for the projected Social
Security offset:
ANNUAL PENSION PAYABLE FOR LIFE
AFTER SPECIFIED YEARS OF CREDITED SERVICE
AVERAGE ANNUAL COMPENSATION -----------------------------------------
IN HIGHEST 5 OF LAST 10
CALENDAR YEARS OF SERVICE 10 YEARS 20 YEARS 30 YEARS 40 YEARS
------------------------- -------- -------- -------- --------
$ 200,000 $ 40,000 $ 80,000 $120,000 $140,000*
400,000 82,000 164,000 246,000 280,000*
600,000 124,000 248,000 372,000 420,000*
800,000 166,000 332,000 498,000 560,000*
1,000,000 208,000 416,000 624,000 700,000*
1,200,000 250,000 500,000 750,000 840,000*
1,400,000 292,000 584,000 876,000 980,000*
1,600,000 334,000 668,000 1,002,000 1,120,000*
1,800,000 376,000 752,000 1,128,000 1,260,000*
*Figures reduced to reflect the maximum limitation of 70% of compensation.
This table does not reflect limitations imposed by the Internal Revenue
Code of 1986, as amended, on pensions paid under federal income tax qualified
plans. However, an executive officer covered by Briggs & Stratton's unfunded
program will receive the full pension that the officer would be entitled in the
absence of such limitations. Compensation, for purposes of the table, includes
the compensation shown in the Summary Compensation Table under the headings
"Salary," "Bonus" and "LTIP Payouts."
The years of credited service under the Retirement Plan for the individuals
named in the Summary Compensation Table are: Mr. Shiely-16; Mr. Stratton-28; Mr.
Savage-10; Mr. Brenn-24 and Mr. Hamilton-26.
EMPLOYMENT AGREEMENTS
All executive officers of Briggs & Stratton, including the officers named
in the Summary Compensation Table, are parties to a two-year employment
agreement, except that Mr. Stratton is not a party to an employment agreement
because he is no longer an employee. The agreements have a one-year automatic
extension upon each anniversary date unless either party gives a 30-day notice
prior to the anniversary date that the agreement will not be renewed. Under the
agreement, the officer agrees to perform the duties currently being performed in
addition to other duties that may be assigned from time to time. Briggs &
Stratton agrees to pay the officer a salary of not less than that of the
previous year and to provide fringe benefits that are provided to all other
salaried employees of Briggs & Stratton in comparable positions. In the event of
a termination, the payments are continued for the remaining term of the
agreement.
CHANGE OF CONTROL EMPLOYMENT AGREEMENTS
The Board of Directors has authorized the Chairman of the Board to offer to
all executive officers change in control employment agreements. These ensure the
employee's continued employment following a "change in control" on a basis
equivalent to the employee's employment immediately prior to such change in
terms of position, duties, compensation and benefits, as well as specified
payments upon termination following a change in control. Briggs & Stratton
currently has such agreements with all of its executive officers. These
agreements become effective only upon a defined change in control of Briggs &
Stratton, or if the employee's employment is terminated upon or in anticipation
of such a change in control and automatically supersede any existing employment
agreement. Under the agreements, if during the employment term (three years from
the change in control) the employee is terminated other than for "cause" or if
the employee voluntarily terminates his employment for good reason or during a
30-day window period one year after a change in control, the employee is
entitled to specified severance benefits, including a lump sum payment of three
times the sum of the employee's annual salary and bonus and a "gross-up" payment
that will, in general, effectively reimburse the employee for any amounts paid
under Federal excise taxes.
16
AUDITORS
The Board of Directors has selected the public accounting firm of Deloitte
& Touche LLP as its independent auditors for the current year ending June 29,
2003. A representative of Deloitte & Touche LLP will be present at the Annual
Meeting. He or she will have the opportunity to make a statement and respond to
appropriate questions.
On May 20, 2002 the Company dismissed Arthur Andersen LLP as its
independent public accountants and appointed Deloitte & Touche LLP as its new
independent accountants. The decision to dismiss Arthur Andersen and to retain
Deloitte & Touche was recommended by the Company's Audit Committee and approved
by its Board of Directors. Arthur Andersen's reports on the Company's
consolidated financial statements for the fiscal years ended July 1, 2001 and
July 2, 2000, did not contain any adverse opinion or disclaimer of opinion, nor
were they qualified or modified as to uncertainty, audit scope, or accounting
principles. During the Company's two most recent fiscal years ended July 1, 2001
and July 2, 2000, and the subsequent interim period through May 20, 2002 (date
of dismissal), there were no disagreements between the Company and Arthur
Andersen on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which disagreements, if
not resolved to Arthur Andersen's satisfaction, would have caused them to make
reference to the subject matter of the disagreement in connection with their
reports. None of the reportable events described in Item 304(a)(1)(v) of
Regulation S-K occurred during the fiscal years ended July 1, 2001 and July 2,
2000, and the subsequent interim period through May 20, 2002 (date of
dismissal). During the fiscal years ended July 1, 2001 and July 2, 2000, and the
subsequent interim period through May 20, 2002 (date of dismissal), the Company
did not consult with Deloitte & Touche regarding any of the matters or events
set forth in Item 304(a)(2)(i) and (ii) of Regulation S-K.
ANNUAL REPORT TO THE SECURITIES AND EXCHANGE
COMMISSION ON FORM 10-K
Briggs & Stratton is required to file an annual report, called Form 10-K,
with the Securities and Exchange Commission. A copy of Form 10-K for the fiscal
year ended June 30, 2002 accompanies this Proxy Statement. Requests for
additional copies should be directed to Carole Ford, Shareholder Relations,
Briggs & Stratton Corporation, P.O. Box 702, Milwaukee, Wisconsin 53201.
SHAREHOLDER PROPOSALS
Proposals that shareholders intend to present at the 2003 Annual Meeting
must be received at Briggs & Stratton's principal executive offices no earlier
than July 5, 2003 and no later than July 30, 2003, in order to be presented at
the meeting and must be in accordance with the requirements of the Bylaws of
Briggs & Stratton. Shareholder proposals must be received by May 20, 2003 to be
considered for inclusion in the proxy material for that meeting under the SEC's
proxy rules.
BY ORDER OF THE BOARD OF DIRECTORS
BRIGGS & STRATTON CORPORATION
Robert F. Heath, Secretary
Wauwatosa, Wisconsin
September 17, 2002
17
BRIGGS & STRATTON CORPORATION
P.O. Box 702, Milwaukee, WI 53201--0702
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
(SEE REVERSE SIDE)
\/ DETACH BELOW AND RETURN USING THE ENVELOPE PROVIDED \/
- --------------------------------------------------------------------------------
PROXY
[BRIGGS & STRATTON LOGO]
BRIGGS & STRATTON CORPORATION
PROXY/VOTING INSTRUCTIONS FOR ANNUAL MEETING
OF SHAREHOLDERS--OCTOBER 16, 2002
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned appoints each of FREDERICK P. STRATTON, JR., JOHN S. SHIELY and
ROBERT F. HEATH, with power of substitution, attorneys and proxies, to vote all
shares votable by the undersigned at the shareholders' annual meeting of Briggs
& Stratton Corporation and at any adjournments. The meeting will be held in
Charlotte, North Carolina on October 16, 2002 at 9:00 a.m. Eastern Daylight
Time. My directions are on the reverse side of this proxy. I revoke any proxy
previously given.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED. IF NO
DIRECTION IS MADE, THE PROXY WILL BE VOTED BY THE PROXIES NAMED "FOR" THE
ELECTION OF DIRECTORS AND IN THEIR DISCRETION ON ANY OTHER MATTERS PROPERLY
BROUGHT TO A SHAREHOLDER VOTE AT THE MEETING.
If the undersigned holds Briggs & Stratton shares in Briggs & Stratton
Corporation's 401(k) Plans or Dividend Reinvestment Plan, this proxy constitutes
voting instructions for any shares so held.
(Continued and to be Signed on Reverse Side)
BRIGGS & STRATTON CORPORATION
[BRIGGS & STRATTON LOGO]
INSTRUCTIONS FOR VOTING YOUR PROXY
Shareholders of record have three ways to vote their proxies:
- - BY TELEPHONE (using a touch-tone telephone)
- - THROUGH THE INTERNET (using a browser)
- - BY MAIL (traditional method)
Your telephone or Internet vote authorizes the named proxies to vote your shares
in the same manner as if you had returned your proxy card. We encourage you to
use these cost effective and convenient ways of voting, 24 hours a day, 7 days a
week.
TELEPHONE VOTING This method of voting is available for residents of the U.S.
and Canada
- On a touch-tone telephone, call TOLL FREE 1-888-216-1332, 24 hours a
day, 7 days a week
- You will be asked to enter the CONTROL NUMBER shown below followed by
the pound sign (#)
- Have your proxy card ready, then follow the prerecorded instructions
- Your vote will be confirmed and cast as you directed
INTERNET VOTING
- Visit the Internet voting Website at https://www.proxyvotenow.com/bgg
- Enter the CONTROL NUMBER shown below and follow the instructions on
your screen
- You will incur only your usual Internet charges
VOTING BY MAIL
- Simply mark, sign and date your proxy card and return it in the
postage-paid envelope
YOU MAY VOTE BY TELEPHONE OR INTERNET ANYTIME UNTIL 5:00 P.M. EASTERN
DAYLIGHT TIME, ON OCTOBER 15, 2002. DO NOT RETURN YOUR PROXY CARD IF YOU
ARE VOTING BY TELEPHONE OR INTERNET.
YOUR CONTROL NUMBER IS:
-------------------------------------------
\/ TO VOTE BY MAIL PLEASE DETACH PROXY CARD HERE AND RETURN IN ENVELOPE PROVIDED \/
- ------------------------------------------------------------------------------------------------------------------------------------
/X/ PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
BRIGGS & STRATTON CORPORATION ANNUAL MEETING
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION OF DIRECTORS.
(a) Election of Three Directors: Nominees--(01) Jay H. Baker; (02) Michael E. Batten;
(03) Brian C. Walker VOTE FOR VOTE WITHHELD
*To withhold authority to vote for any nominee, write the nominee's name on the space below. all nominees from all
listed* nominees listed
-------------------------------------------------------------------------------------------- / / / /
(b) In the discretion of the appointed proxies on any other matters properly
brought to a shareholder vote at the meeting, all as set forth in the Notice
and Proxy Statement.
You are acknowledging receipt of the Notice and Proxy Statement by
submitting your vote.
/ / I PLAN TO ATTEND THE MEETING. DATE: , 2002
-----------------------------------
-----------------------------------------------
SIGNATURE(S) IN BOX
Please sign exactly as your name appears,
giving your full title if signing as attorney
or fiduciary. If shares are held jointly, each
joint owner should sign. If a corporation,
please sign in full corporate name by duly
authorized officer. If a partnership, please
sign in partnership name by authorized person.