BRIGGS & STRATTON CORPORATION ECONOMIC VALUE ADDED INCENTIVE COMPENSATION PLAN

I.

Plan Objectives

A.

To promote the maximization of shareholder value over the long term by providing incentive compensation to key employees of Briggs & Stratton Corporation (the “Company”) in a form which is designed to financially reward participants for an increase in the value of the Company to its shareholders.

B.

To provide competitive levels of compensation to enable the Company to attract and retain employees who are able to exert a significant impact on the value of the Company to its shareholders.

C.

To encourage teamwork and cooperation in the achievement of Company goals.

D.

To recognize differences in the performance of individual participants.

II.

Plan Administration

III.

Definitions

A.

“Accrued Bonus” means the bonus, which may be negative or positive, which is calculated in the manner set forth in Section V.A.

B.

“Actual EVA” means the EVA as calculated for the relevant Plan Year.

C.

“Base Salary” means the amount of a Participant’s base compensation earned during the Plan Year without adjustment for bonuses, salary deferrals, value of benefits, imputed income, special payments, amounts contributed to a savings plan or similar items.

D.

“Capital” means the Company’s weighted average monthly operating capital for the Plan Year, calculated as follows:

E.

“Capital Charge” means the deemed opportunity cost of employing Capital in the Company’s businesses, determined as follows:

F.

“ Cost of Capital” means the weighted average of the cost of equity and the after tax cost of debt for the relevant Plan Year on a market value basis. The Cost of Capital will be determined (to the nearest tenth of a percent) by the Committee prior to each Plan Year, consistent with the following methodology:

a)

Cost of Equity = Risk Free Rate + (Business Risk Index X Average Equity Risk Premium)

b)

Debt Cost of Capital = Debt Yield X (1 - Tax Rate)

c)

The weighted average of the Cost of Equity and the Debt Cost of Capital is determined by reference to the actual debt-to-capital ratio

G.

“ Designated Key Contributor ” means those Participants named by the Chief Executive Officer as a Designated Key Contributor under the Plan.

H.

“Divisional EVA Performance Factor” means an Individual Performance Factor calculated in the same manner as the Company Performance Factor as set forth in Section VI.A., except that EVA, Actual EVA, Target EVA, EVA Leverage Factor, NOPAT, Capital, Capital Charge and other relevant terms shall be defined by reference to the particular operating division, service division or sales group, not by reference to the entire Company.

I.

“Economic Value Added” or “EVA” means the NOPAT that remains after subtracting capital Charge, expressed as follows:

J.

“EVA Leverage Factor” means the expected deviation in EVA from the average EVA, generally reflected as a percentage of capital employed. For purposes of this Plan, the Company’s EVA Leverage Factor is determined to be $27 million.

K.

“Key Managers” mean those Participants designated as Key Managers by the Committee with respect to any Plan Year.

L.

“NOPAT” means cash adjusted net operating profits after taxes for the Plan Year, calculated as follows:

M.

“Plan Year” means the one year period coincident with the Company’s fiscal year.

N.

“Senior Executives” means those Participants designated as Senior Executives by the Committee with respect to any Plan Year.

O.

“Target EVA” means the target level of EVA for the Plan Year, determined as follows:

IV.

Eligibility

A.

Eligible Positions . In general, all Company Officers, Division General Managers, Key Managers and members of the corporate operations group, and certain direct reports of such individuals may be eligible for participation in the Plan. However, actual participation will depend upon the contribution and impact each eligible employee may have on the Company’s value to its shareholders, as determined by the Chief Executive Officer of the Company, and approved by the Committee.

B.

Nomination and Approval . Each Plan Year, the Chief Executive Officer of the Company will nominate eligible employees of the Company and its subsidiaries and affiliates to participate in the Plan for the next Plan Year. The Committee will have the final authority to select Plan participants (the “Participants”) among the eligible employees nominated by the Chief Executive Officer of the Company. Continued participation in the Plan is contingent on approval of the Committee. Selection normally will take place, and will be communicated to each Participant, prior to the beginning of the pertinent Plan Year.

V.

Individual Participation Levels

A.

Calculation of Accrued Bonus . Each Participant’s Accrued Bonus will be determined as a function of the Participant’s Base Salary, the Participant’s Target Incentive Award (provided in paragraph V.B., below), Company Performance Factor (provided in Section VI.A.) and the Individual Performance Factor (provided in Section VI.B.) for the Plan Year. Each Participant’s Accrued Bonus will be calculated as follows:

B.

Target Incentive Awards . The Target Incentive Awards will be determined according to the following schedule:

VI.

Performance Factors

A.

Company Performance Factor Calculation . For any Plan Year, the Company Performance Factor will be calculated as follows: