Exhibit
10.1
EARLY RETIREMENT
AGREEMENT
THIS EARLY RETIREMENT AGREEMENT
(this “Agreement”) is entered into on August 21,
2009 by and between John S. Shiely (“Executive”) and
Briggs & Stratton Corporation (the
“Corporation”).
Background
Executive has notified the
Corporation’s Board of Directors (the “Board”)
that he intends to retire from the Corporation’s employ as of
December 31, 2009 (“Early Retirement”). On that
date, Executive will qualify for early retirement treatment under
the Corporation’s qualified pension plan and the
Corporation’s non-qualified retirement, equity and benefit
plans given that he will be older than age 55 and have more than
ten years of service with the Corporation.
Executive has offered to submit his
resignation as a director upon his Early Retirement in accordance
with the Corporation’s corporate governance guidelines, and
the Board desires to retain the services of Executive as a director
and Chairman of the Board for a period of time after his Early
Retirement.
Executive and the Board desire to
fix the terms governing his Early Retirement and his continued
service as a director and Chairman of the Board.
Agreement
NOW, THEREFORE, the parties hereto
hereby agree as follows:
1. Early Retirement as
Employee . Executive shall retire as an employee and Chief
Executive Officer of the Corporation and as a director and Chairman
of the Board of Briggs & Stratton Power Products Group,
LLC effective December 31, 2009. The Employment Agreement
dated as of January 1, 2009 between Executive and the
Corporation (the “Standard Employment Agreement”) and
the Employment Agreement dated as of January 1, 2009 (dealing
with compensation and benefit issues if there were to be a Change
of Control of the Corporation) (the “Change of Control
Agreement”) shall both continue in effect until
Executive’s Early Retirement on December 31, 2009. Upon
his Early Retirement, the Standard Employment Agreement and Change
of Control Agreement shall terminate, except that the
non-competition, non-solicitation and confidentiality provisions
contained in Sections 5.2 through 5.6 and the indemnification
provision contained in Section 6 of the Standard Employment
Agreement shall continue in effect thereafter in accordance with
their respective terms.
2. Incentive Compensation
Plans . Executive shall continue to be a participant in the
Corporation’s incentive compensation plans until his Early
Retirement in accordance with the terms of those plans and
Section 3.2 of the Standard Employment Agreement. After his
Early Retirement, the provisions of the incentive compensation
plans governing employees who qualify for Early Retirement shall
govern the awards to Executive under the plans. The specific
application of the provisions of selected incentive compensation
plans to Executive’s continued employment through
December 31, 2009 and his Early Retirement are set forth
below. Capitalized terms used in each of the following
subparagraphs of this Paragraph 2 shall have the same meaning as
set forth in the referenced incentive compensation plan.
(a) The Corporation’s
Incentive Compensation Plan (the “ICP”) . Executive
has been awarded Stock Options and Deferred Stock under the ICP.
The rules regarding Retirement under the ICP apply to Executive
since Retirement is defined in Section 1(r) of the ICP to
include Early Retirement. Under the authority granted to it under
the ICP, the Compensation Committee of the Board (the
“Committee”) has agreed to accelerate the vesting of
all unvested Stock Options that are outstanding on
December 31, 2009, such that they will become immediately
exercisable for the period set out in Section 5(h) of the ICP.
Pursuant to the Deferred Stock Award Agreements (“Award
Agreements”) setting forth the terms of the Deferred Stock
awarded to Executive under the ICP, the Deferred Stock shall
continue to vest after Executive’s Early Retirement in
accordance with the terms of the Award Agreements, but in no event
later than the fifth anniversary of the Award Date in each
respective Award Agreement.
(b) The Corporation’s
Economic Value Added Incentive Compensation Plan (the “EVA
Plan”) . The Executive’s entitlement to Accrued
Bonuses under the EVA Plan for the 2009 and 2010 Plan Years will be
determined in accordance with the terms of the EVA Plan, consistent
with the Executive’s factors under the EVA Plan and the
treatment of other executive officers for the applicable Plan Year.
Pursuant to the Executive’s Consent dated June 2, 2009,
the Accrued Bonus owing to Executive under the EVA Plan for the
2009 Plan Year will be paid in December of 2009. Pursuant to
Section VII(D) of the EVA Plan, the Executive’s Accrued Bonus
for the 2010 Plan Year will be determined based on the number of
weeks he is employed by the Corporation during the 2010 Plan Year,
since Executive’s employment during the 2010 Plan Year will
be terminated by reason of Early Retirement.
(c) The Corporation’s
Powerful Solution Incentive Compensation Program (the “PSI
Plan”) . The Executive’s entitlement to an
incentive payment (in the form of Restricted and/or Deferred Stock)
under the PSI Plan for the 2009 and 2010 Plan Years will be
determined in accordance with the terms of the PSI Plan, consistent
with the Executive’s goals under the PSI Plan and the
treatment of other executive officers for the applicable Plan Year.
Pursuant to Section 3.0 of the PSI Plan, if there is an award
to Executive for the 2010 Plan Year, the provisions governing a
termination of employment for Early Retirement under Section VII(D)
of the EVA Plan will be applied to determine amounts owing to
Executive under the PSI Plan. Nothing contained in this Agreement
shall obligate the Corporation to continue the PSI Plan for the
2010 Plan Year, consistent with the Committee’s authority
under Section 7.0 of the PSI Plan to terminate it at any
time.
(d) The Corporation’s
Premium Option and Stock Award Program (the “POSA
Program”) . The Executive’s entitlement to an award
(in the form of Restricted and/or Deferred Stock and Premium Stock
Options (“PSOs”)) under the POSA Program for the 2009
and 2010 Plan Years will be determined in accordance with the
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